A generation or so ago, people didn’t just retire from work – many of them also withdrew from a whole range of social and community activities. But now, it’s different: The large Baby Boom cohort, and no doubt future ones, are seeking an active lifestyle and continued involvement in their communities and the world. So, what should you know about this “new retirement”? And how can you prepare for it?
For starters, consider what it means to be a retiree today. The 2020 Edward Jones/Age Wave Four Pillars of the New Retirement study has identified these four interrelated, key ingredients, along with the connected statistics, for living well in the new retirement:
- Health – While physical health may decline with age, emotional intelligence – the ability to use emotions in positive ways – actually improves. Forty-eight percent of Boomers (age 56-74) and two-thirds of the Silent Gen (age 75+) rate their mental health as very good to excellent. The strong mental health of many retirees may help them cope with their physical conditions. However, not surprisingly, retirees fear Alzheimer’s and other types of dementia more than any physical ailment, including cancer or infectious diseases, according to the “Four Pillars” study.
- Family – Retirees get their greatest emotional nourishment from family relationships – and they’ll do anything it takes to help support those family members, even if it means sacrificing their own financial security. Conversely, retirees lacking close connections with family and friends are at risk for all the negative consequences resulting from physical and social isolation.
- Purpose – Eighty-nine percent of Canadians feel that there should be more ways for retirees to use their talents and knowledge for the benefit of their communities and society at large. Retirees want to spend their time in useful, rewarding ways – and they’re well capable of doing so, given their decades of life experience. Retirees with a strong sense of purpose have happier, healthier lives and report a higher quality of life.
- Finances – Retirees are less interested in accumulating more wealth than they are in having sufficient resources to achieve the freedom to live their lives as they choose. Yet, more than one third of Canadian retirees find that managing money in retirement can be even more challenging than saving for it. And the “unknowns” can be scary: Almost three quarters of those who plan to retire in the next 10 years say they have no idea what their healthcare and long-term care costs will be in retirement.
So, if you’re getting close to retirement or already in retirement and you’re considering these factors, how can you best integrate them into a fulfilling, meaningful way of life? You’ll want to take a “holistic” approach by asking yourself some key questions: What do you want to be able to do with your time and money? Are you building the resources necessary to enjoy the lifestyle you’ve envisioned? Are you prepared for the increasing costs of health care as you age? Have you taken the steps to maintain your financial independence, and avoid burdening your family, in case you need some type of long-term care? Have you created the estate plans necessary to leave the type of legacy you desire?