Americans want a retirement that looks different from that of previous generations, according to a study released this week by Edelman Financial Engines.
The research shows that Americans are imagining their retirement years as a launchpad for active living and passion projects rather than a time to slow down.
The burden now is on financial services providers to get in step with these aspirations.
“For too long, the retirement industry has treated this stage of life like a finish line,” Ralph Haberli, the company's CEO, said in a statement. “That mindset is outdated.”
Americans, Haberli said, want to live fully, prioritize health and well-being and pursue meaningful passions that bring meaning.
Greenwald Research conducted an online survey in October among 2,000 Americans who were at least 30 years old. The total sample included an oversample of 1,000 respondents 45 to 70 years old with household assets between $500,000 and $3 million, who are currently working with a financial professional or are open to doing so.
Time Is of the Essence
Americans are increasingly weighing time against money, the survey found, and finding that the choices are not easy to make. Asked to choose between a shorter work week or a raise, 44% of full-time workers said they would prefer to work one day less for the same salary, while 56% would opt for a $20,000 pay increase.
This tension between time and income is not just hypothetical, the survey results showed. Forty-two percent of respondents said they had made a career choice that favored time over pay. That priority was especially strong among those younger than 50 and among Black and Hispanic Americans.
Parents, in particular, place a premium on the moments that matter. More than half said they would pay to relive a day with their kindergarten-age child, and nearly a quarter would sacrifice a significant portion of their retirement savings to do so.
“People aren’t just telling us they want more time — they’re telling us they want more time with the people that matter most, and that has financial implications,” Michael Liersch, chief planning officer at EFE, said in the statement.
“What often goes unrecognized is that those changes need to be reflected in a financial plan so that money is used in a way that will help people move forward, not backward.”
Health Over Money
The study underscored the growing recognition that longevity and well-being are priceless. Sixty-three percent of survey participants said they would rather never worry about their health than never have to worry about money again, and 58% said they would choose five extra years of good health over an extra $1 million in retirement savings.
The choice becomes even more pronounced in wealthier cohorts. Among those with more than $1 million in household assets, 77% would pick health over wealth.
Major life events often bring weighty, stressful decisions. The survey found a desire among respondents for professional guidance early.
In fact, 43% of those who work with a financial professional said that when a major life event occurs, they get in touch with their advisor before making any decisions, including 13% who said their advisor is one of the first people they talk to.
“Financial planning should feel just as personal as the life it supports,” Liersch said. “We believe the best plans start with listening — understanding each client’s needs, concerns and goals around health, family, work and more — then building strategies that help them live fully, with confidence and purpose at every stage.”
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.