How to Live Well in Retirement
Edward Jones and Age Wave’s latest study has shown that advisers should “more deeply understand what people care about in retirement—their hopes, dreams and fears,” said Ken Cella, principal of Edward Jones’ Client Services Group, during a webinar discussing the two firms’ “four pillars” of the new retirement—health, family, purpose and finances.
The pandemic has caused 76% of Americans “to refocus on what absolutely matters to them, and they now have new purposes,” said Maddy Dychtwald, co-founder of Age Wave.
More specifically, “Fifty-six percent of retirees say it’s a new chapter in their life, and they are not winding down,” Dychtwald said. “Rather, the word ‘freedom’ resonates—freedom to live life and grow on your own terms.”
Thus, to make a true connection in a one-on-one meeting with a near-retiree, advisers still need to walk the participant through retirement, health care, long-term care and estate planning, but they should remember “the softer side as well,” Dychtwald said.
“Family remains the strongest of the four pillars [when averaging responses of the five generations surveyed], with connections growing stronger throughout COVID,” she said.
Asked what is most important to them, retirees told Age Wave that their top priority is health, then family and then purpose for being, with 90% of them citing this order. “This [indicates] that people care more about significance than success,” Dychtwald said. So retirement plan advisers should consider starting off their relationship with near-retirees by asking them what goals they have for retirement, she said.
Dychtwald said Age Wave has found that Baby Boomers heading into retirement want to use their talents, “be that helping out in school, starting a business, helping the homeless or teaching—and all of this is incredibly needed and wanted.”
Starting with the premise that a retiree will have a 25-year retirement, Age Wave has extrapolated the following datasets: Retirees want to volunteer 3.3 hours weekly, Dychtwald said. Over the next 20 years, 69 million Americans will be retiring. That will translate into 238 billion hours of volunteer time from Baby Boomer and Generation X retirees, worth $6.8 trillion in man hours, she said.
While age discrimination and underemployment of older Americans are often discussed by those in the retirement planning industry, Dychtwald said Age Wave believes that COVID-19 showed that older adults are pretty resilient and are an “untapped force of social good who have the talent, the knowledge and the experience to bear” on many good things, such as mentoring the young.
The end result, said Cella, is that retirement plan advisers, who are focused on helping participants accumulate money, need to realize that while the financial piece of the equation is obviously critical, they should think about the emotional and physical sides of the retirement equation as well.