With ongoing inflation, high interest rates and volatility continuing to impact the market, it isn’t hard to see why Americans are increasingly concerned about outliving their nest egg. As a result, many are rethinking their retirement.
According to a recent survey from F&G, half (50%) of pre-retired and retired Americans are considering delaying or coming out of retirement. Financial factors are certainly a reason, with 52% of pre-retirees worried they won’t have enough money in retirement, and 42% of retirees worried about inflation. But money doesn’t tell the whole story, as the report also revealed that many Americans are returning to work for non-financial reasons — something that I can relate to as well.
Retirement is more than financial independence
Conventional wisdom may say someone would never return to work after retiring unless they were financially forced to, but the reality is many Americans are considering going back to work simply because it makes them feel good. In fact, 50% of retirees are considering “unretiring” because they enjoy the intellectual challenge/stimulation from working, and 36% feel a lack of purpose in retirement.
These responses resonated with me. I was briefly retired, then made the decision to return to the workforce for non-monetary reasons, which is how I eventually took on a new challenge at F&G. The report shows more Americans are having the same feelings I had. Earlier in my career, when I thought of retirement, I saw it as synonymous with achieving financial freedom. That was more important to me than the general idea of “stopping work.” I've always enjoyed working and being a part of a team, but with retirement I was excited about having more control over my life and spending more of my time on the things I wanted to pursue.
When I initially retired, I loved having freedom over my day, but this feeling was short-lived. After a while, I noticed myself missing the camaraderie of the workplace. Growing up, I played a lot of team sports, and I didn't appreciate how work had become my “adult team sport” later in life. Ultimately, that feeling of missing something persisted until I made the decision to “unretire” and get back to working again.
The new idea of retirement and how to get there
Just as hybrid work has emerged over the last few years, we’re seeing “hybrid retirement” become more common. Many folks are realizing that the old vision of retirement as working one day, then being completely retired the next is no longer an attractive prospect. Generations are also now wired differently, and people are approaching retirement differently than their parents or grandparents. They want to learn, achieve goals and spend time with other people who share similar passions. So how can they ensure that happens?
Looking back, the best retirement planning advice I received was 1) plan for it in advance, envisioning what your daily life will look like, and 2) don’t overcommit yourself in the first year of retirement.
It’s important to financially plan for retirement, but people approaching retirement also need to plan for their life goals. It’s critical to carefully think through what you'd like retirement to look like. Do you want to travel? Spend more time with family, such as your grandkids? Volunteer? For people in a relationship, especially, it’s easy to make assumptions that can lead to disappointment, so aligning on a common vision is a critical first step. Once someone can identify what will inspire and bring them purpose in retirement, they can make a plan to ensure they are working to achieve it.
Experts can help
One of the best ways people can ensure they are well positioned to achieve the retirement they want, both financially and non-financially, is to speak with a financial adviser or similar professional.
Surprisingly, the survey found that half (50%) of pre-retirees and retirees don’t currently work with a financial adviser. This is a huge missed opportunity for people to get input about their retirement plan and goals. Speaking with an adviser can alleviate concerns around inflation and outliving savings and ensure individuals have the right products to meet their needs. For example, retirees and pre-retirees may want to consider options such as annuities, which can provide peace of mind and guaranteed income for life regardless of what happens in financial markets. For financial advisers, it’s also a chance to look beyond just the portfolio and lean into the role of “life coach” to help clients plan for overall happiness as well.
Ultimately, Americans’ retirement views are changing and moving beyond just financial concerns. Everyone’s life situation, goals and “dream retirement” are different, so there’s no one formula based on age or when or how to retire. For example, for Baby Boomers considering pushing back their retirement, the top reason they are doing so is because they enjoy the intellectual challenge/stimulation from working (51%), whereas for Gen Xers the top reason is tied between being worried about inflation (45%) and wanting more financial options and a larger safety net (45%).
Spending time today reviewing your concerns, understanding your goals and building a plan to get there can pay off for years to come. Once people have that added direction, they won’t have to worry about feeling like they are missing something in retirement. Instead, they’ll enter that next chapter more financially secure and personally fulfilled.
Note: The F&G survey was conducted online by Directions Research and fielded from June 7 to June 16, 2023, among a nationally representative sample of 2,015 U.S. adults 18 years of age and older. Respondents were targeted to Americans Aged 50+, who are financial decision-makers and have $100K+ in financial products/savings.
For more than 30 years, Chris Blunt has held senior leadership positions at several major insurance and financial services companies. He joined F&G in 2019 and currently serves as the Chief Executive Officer. Prior to that, he served as Chief Executive Officer at Blackstone Insurance Solutions and spent nearly 13 years at New York Life in a variety of executive roles.
Capital Gains Tax Exclusion for Homeowners: What to Know
Tax Breaks The IRS capital gains home sale exclusion can be a valuable tax-saving tool if you’re eligible.
By Kelley R. Taylor Last updated
Kiplinger's Mutual Fund Guide For 2024
Giant U.S. tech stocks dominate many of the top-performing names in Kiplinger's mutual fund guide, but small and foreign companies are well represented too.
By Nellie S. Huang Published
The Three Basic Components of a Good Estate Plan
Getting your estate in order so everyone knows what you want when the time comes can save your loved ones confusion and stress.
By Jason “JB” Beckett Published
Is Your Financial Adviser Listening to You?
Survey finds financial advisers and their clients might need to break out the talking stick. Repetition and summarizing are key to ensure your points are heard.
By Suzanne Norman, CIMA®, CPCC Published
Did You Get a Cash Windfall? The Case for Doing Nothing
An inheritance or lottery win can be a stroke of good fortune, but if you mismanage your funds, you could end up worse off than before your windfall.
By Samuel V. Gaeta, CFP® Published
How to Use Your Estate Plan to Save Tax Now: A Timely Update
Consider an upstream basis trust and a general power of appointment for an older family member to reduce capital gains taxes on highly appreciated assets.
By John M. Goralka Published
Three Common Mutual Fund Misconceptions Debunked
Mutual funds let investors access a basket of securities rather than buying individual ones on their own, but there are some misconceptions about them.
By Brian Spinelli, CFP®, AIF® Published
529s: No Longer the Ho-Hum Investing Device for College
Changes to the plans allow for the savings to be rolled into a Roth IRA, as long as certain rules are met, if a child decides not to pursue their education.
By Neale Godfrey, Financial Literacy Expert Published
To Make the Case for Equities in the Long Term, Look to the Past
While cash yields are attractive now, if we look at the performance of equities in the past, we can expect that, going forward, they could be a better bet.
By David Blanchett, PhD, CFA, CFP® Published
Workplace Financial Coaching Has Become Ever More Important
Employees face growing challenges to their financial wellness today, so it’s more critical than ever that employers provide the help they need to navigate them.
By Greg Ward, CFP® Published