8 New Retirement Trends: Is Your Future as Rosy as the Data Suggests it Should Be?
Allianz Life recently surveyed 3,000 Americans, including 1,000 baby boomers aged 52-70. This and other recent studies indicate really positive news about retirement readiness.
Explore how news for baby boomers and retirement is moving in a better direction and discover 8 retirement trends you might need to keep an eye on if you want a truly secure future:
1. You Are Feeling Good and Well Prepared
According to the Allianz study, 72% of baby boomers actually feel that they are financially prepared for retirement. This is a huge — 15 percentage point — increase in the retirement trend from 2010 when only 57% felt that they had what it took for a secure future.
However, feeling prepared is not exactly the same thing as actually being prepared. Everyone should document their finances and think through spending and income for the rest of your life. Learn “How to Create a Useful Retirement Plan, Not Just One with a High Thunk Value.”
2. This Isn’t Your Parents’ Retirement
The Allianz study also found that a full 82% of baby boomers believe that “a retirement starting at age 65 spent doing exactly what you want” — like their parents generation did — is no longer a viable option.
While this might sound like a negative retirement trend, this is actually quite good news. Working a little longer and having goals and responsibilities in retirement will actually increase your well being during this phase of life.
Want more tips for well being? Explore 41 Tips for Happiness, Health and Wealth in Retirement.
3. Worried? Not Really… You Are Actually Optimistic
While you may be worried about your retirement security and running out of money, it turns out that you just aren’t all THAT worried. Sixty five percent of baby boomers say that they:
“Just have this feeling that everything’s going to work out.“
This optimism is a reversal from a recent retirement trend toward doom and gloom.
While it is nice to be optimistic, it is probably still better to have a real plan. You might want to think through, “What Happens If I really do Run Out of Money.” Better yet, create a detailed structure for your retirement! The NewRetirement retirement planning calculator makes it easy to document and maintain a detailed and sophisticated plan for your financial future.
4. I’ll Gladly Pay You Tuesday for a Hamburger Today
The Allianz research suggests that a full 48% of baby boomers believe that credit cards are a survival tool. And, according to a 2017 survey by Bankers Life Center for a Secure Retirement, just 34 percent of middle-income Baby Boomers expect to retire without any lingering debt.
This is indeed one of the few negative retirement trends. Debt can be a constant source of stress and affect retirees’ ability to keep their homes, pay necessary living expenses, and even be accepted into independent- or assisted-living facilities.
Worse yet, unlike Wimpy of the Popeye cartoons, retirees are unlikely to have more money next Tuesday (next month or next year) for a hamburger (whatever debt you have) today. Wimpy apparently gets a fresh paycheck on Tuesdays. Retirees have a fixed set of resources without any big pay days.
5. You Have a Few Trust Issues
Another persistent negative retirement trend is the fact that baby boomers have a few “trust issues” when it comes to getting personal finance help. Nearly 70% of baby boomers indicate that they don’t really trust online financial advice. And, many people are skeptical about the guidance from a financial advisor.
If you aren’t sure who to trust, here are a few tips:
- If using a financial advisor, be sure to use a resource who will act as a fiduciary. Not sure what fiduciary means? Read, “What is a Fiduciary and Why You Should Care.” Another tip for choosing a financial advisor is to find one who works for fees rather than on commission. And, don’t be shy about asking questions if you don’t fully understand something an advisor recommends.
- Whether you get guidance from an advisor, an article, or a friend, it is important that you can apply the advice in a meaningful way. If you have a detailed retirement plan, you can try out different scenarios using your own financial information and you can see the real life implications of the advice.
The NewRetirement retirement planning calculator lets you set up a very detailed digital version of your overall retirement finances. And, it is easy to try out different strategies.
Whatever retirement calculator you use, be sure that it is highly personalized and that you can view all of the assumptions — understand how the tool is calculating your finances.
6. You Know When You’ll Retire
Also from the Allianz survey, apparently a full 68% of baby boomers now know when they can stop working. This is another big improvement in retirement planning. In 2010, only half of baby boomers felt that they knew if and when they could retire securely.
Want to know exactly when you can retire? You may want to consider these “3 Retirement Readiness Questions.”
However, according to the ERBI Retirement Confidence survey, 46% of retirees left the workforce earlier than they had planned. Illness, employer downsizing and other factors can surprise you near the end of your career.
Think about this as you approach retirement and have a plan for what you’ll do if you are forced to retire before you are really ready. You might benefit from exploring “The Best Retirement Jobs” or “How to Find a Retirement Job.”
7. Old Dogs Learn a New Trick: Frugality
Baby boomers have never been known for penny pinching. However, these oldish dogs are definitely learning new tricks: frugality and a mindfulness about managing money.
Paul Kelash, Vice President of Allianz Life says that baby boomer optimism is based on: “A new frugality. Sixty-four percent now see themselves as savers versus spenders. They are also paying attention to how much money is in their accounts and how they are spending, which is a very positive sign. They have a deeper understanding that they are the ones responsible for their own security.”
8. More of You Know How to Predict Retirement Expenses
Another Allianz finding is that now only 50% of baby boomers think that it is “impossible” to predict retirement expenses. This is down from 60% in 2014.
This is a very positive retirement trend. If you want a secure retirement, you need to predict how much you will spend over the next 10, 20 or 30 years.
Not sure it’s possible to make such a far reaching forecast? Try these “9 Tips for Predicting Retirement Expenses.”