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Retirement Stages and Paths

Harli-marten-M9jrKDXOQoU-unsplash For some time, I've been following the important age-related research conducted by Edward Jones and Age Wave in partnership with The Harris Poll for some time now. The latest edition of their landmark study reveals some interesting observations about retirement "stages" and "paths" that is worth highlighting.

Not surprisingly, today's pre-retirees and retirees have adopted a very different definition of retirement from previous generations. According to the study, "a majority (59%) want to work in some way during their retirement, with 22% looking to work part time, 19% hoping to cycle between work and leisure and 18% wishing to work full time."

The study defines the four new stages of retirement:

  1. Anticipation (0-10 years before retirement)
  2. Liberation/Disorientation (0-2 years after retirement)
  3. Reinvention (3-14 after retirement), and
  4. Reflection/Resolution (15+ years after retirement).

Each stage presents unique expectations, priorities, challenges, hopes and helpful planning for retirement.

The study also identified four distinct retirement "journey paths" as follows:

  • Purposeful Pathfinders: This group enjoys the greatest well-being in retirement and is happy, engaged, productive and contributory. They are best prepared for life in retirement and 78% say they are in great shape financially. They began saving for retirement earlier than all the other groups, on average at age 34.
  • Relaxed Traditionalists: Pursuing a more traditional retirement of rest and relaxation, this group had a smooth transition and are well-prepared. Most (81%) retired when they chose, and while they are the most open to relocating, including to adult-living communities, they have fewer aspirations for personal growth or giving back than Purposeful Pathfinders.
  • Challenged yet Hopefuls: This group leads active lives and have focused on self-improvement, but their lives in retirement are constrained and uncertain due to insufficient financial preparation. Half say they often worry about outliving their money and this taints nearly all their future hopes. They began saving for retirement later than all the other groups, at age 45, and over half with retirement accounts (54%) have made early withdrawals along the way.
  • Regretful Strugglers: The largest of the four groups (31%), these challenged individuals are the least prepared for retirement, are the most unhappy and overall feel the least positive about life. 43% say they are financially worse off in retirement than during their working years. The majority (59%) say they have many regrets in life, and 42% feel that life has dealt them a bad hand.  

The research draws the following key conclusion:

"Retirees who report better quality of life took more steps decades in advance to prepare and plan across all the four pillars of Finances, Purpose, Family, and Health. From saving early and consistently and developing healthy habits to communicating with close family and discovering passions and interests, there are several steps pre-retirees and those early in retirement can take to make the most of their retirement."

This research offers valuable insights for all of us. Learn more about it here:
https://www.edwardjones.com/us-en/market-news-insights/retirement/new-retirement

Photo by Harli Marten on Unsplash

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