Longevity and The New
Journey Of Retirement

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Edward Jones and Age Wave initially joined forces in 2019 to explore people’s hopes, dreams, and concerns in retirement, publishing the award-winning study, The Four Pillars of the New Retirement. Our latest collaboration, Longevity and the New Journey of Retirement, is a groundbreaking study of more than 11,000 North American adults, largely pre-retirees and retirees, to explore how the journey of retirement unfolds, the patterns of people’s experience in retirement, and the keys to thriving along the way.

Key insights include:

• Today’s retirees appreciate their longevity and they now count the ideal length of retirement at an average of 29 years.
• The pandemic has made life difficult for all, but especially for today’s new retirees as they make the transition, organize their time, and find new purpose in retirement.
• Financial foresight is central to retirement preparation. Retirees in our study began saving for retirement at age 38, on average, but say they should have started nearly a decade earlier.

Retirement Is Now a New Chapter in Life

For the parents of today’s retirees, the focus of retirement was mostly on “rest and relaxation.” Now the majority of retirees view retirement as “a new chapter in life.”

When does retirement actually begin? There is now no agreed-to milestone marking the start of retirement. About half of today’s retirees and pre-retirees say retirement formally begins when someone stops working full time or steps away from a primary job or career. For 22%, it’s when they start receiving benefits from pensions or Social Security. Interestingly, 17% say it’s when they achieve financial independence and only 10% say it’s reaching a certain age.

This report also dives into the five major forces that are currently converging to reshape the new retirement and the lives of today’s and tomorrow’s retirees. These forces, explained in further detail in our report, are the longevity revolution, the global aging boom, the lifespan-healthspan gap, the demise of the three-legged stool for funding retirement, and the COVID-19 pandemic

Four Stages of the New Journey of Retirement

We’ve found that the new retirement journey unfolds in four distinct stages:

Stage 1: Anticipation (< 10 years before retirement)
Stage 2: Liberation/Disorientation  (0-2 years after retirement)
Stage 3: Reinvention  (3–14 years into retirement)
Stage 4: Reflection/Resolution  (15+ years after retirement)

In our study, we explored the primary needs, challenges, experiences, and questions to ask oneself at each stage. We also examined how people’s emotions, priorities, and attitudes evolve through the journey.

Four Different Journey Paths

We found that those in the heart of retirement divide into four distinct groups, characterized by their attitudes and ambitions, their circumstances and retirement preparations, and their level of enjoyment of life in retirement.

• Purposeful Pathfinders are the most active, engaged, and fulfilled of the groups. They have prepared well for retirement and began saving the earliest of the groups, on average at age 34.
• Relaxed Traditionalists pursue a more traditional retirement, focused on resting and relaxing. They have prepared well financially and are enjoying life for the most part.
• Challenged Yet Hopefuls make the most of retirement despite lack of planning and saving earlier in life. They feel satisfied with today, but challenges lie ahead.
• Regretful Strugglers enjoy retirement least of all and tend to be struggling with financial and health problems.

Preparing for the Journey

Those who have taken more steps to prepare for their retirement journey across the four pillars tend to enjoy their retirement the most. Retirees who report having a high quality of life began saving earlier on average and were less likely to make early withdrawals from retirement accounts than retirees with lower quality of life. They were also more likely to take care of their health prior to retirement, discuss retirement goals with family, and explore new pastimes, hobbies, and interests to help boost their sense of purpose in retirement.

The preparation actions we’ve described don’t end when someone retires. Retirees thriving the most continue to take care of themselves across all four pillars.

The five habits of highly successful retirees are:

1. They attend to their health.
2. They stay socially engaged.
3. They have a clearer sense of purpose.
4. They mindfully manage their finances and keep them on track.
5. They are willing to course correct again and again to achieve their retirement dreams.

Conclusion

People of all ages can anticipate and appreciate the joys and challenges, the twists and turns of the new journey of retirement. Equipped with knowledge and insight, they can prepare more comprehensively and navigate more nimbly to and through their retirement. They’ll be better able to thrive and make the most of all the opportunities of the new retirement.

For more information, visit: www.edwardjones.com