Take a holistic approach: Here’s a look at the ‘New Retirement’
Once you retire, what can you expect from your life? You might be surprised by the things that current retirees are saying about their lifestyles, priorities, relationships and hopes for the future. And you also might find this knowledge quite helpful as you prepare for the day when you become a retiree.
First of all, retirement today is far different – and potentially far more rewarding – than was the case a generation or so ago. Of course, people are living longer now, but the new retirement environment isn’t just about longevity – it’s also about using one’s time in a meaningful way, deepening connections with family and contributing to communities. All these capabilities fit into a framework of four key “pillars”: health, family, purpose and finance, described in a study by Edward Jones and Age Wave called Four Pillars of the New Retirement: What a Difference a Year Makes, which also looks at how attitudes and opinions have changed during the COVID-19 pandemic. Among the study’s findings is a piece of good news: 76% of Americans credit the pandemic with causing them to refocus on what’s most important in life.
And one important element in the life of retirees is, not surprisingly, their optimal well-being in their retirement years. The overwhelming majority of retirees say that all four pillars are essential to this well-being. Let’s look at these pillars and see what you can do to support them:
Having good physical/mental health – Health care and long-term care costs are the greatest financial worries in retirement, according to the Four Pillars study. A financial advisor can recommend ways of addressing these expenses, but you can also take familiar steps, such as getting regular exercise and following a well-balanced diet, to maintain and improve your health.
Having family and friends that care about me – Retirees say that the top contributor to their identity in retirement is their relationships with loved ones, again according to the Four Pillars study. Clearly, it’s important to keep up your relationships with family and friends, before and after you’re retired.
Having a sense of purpose in life – Those with a higher sense of purpose have better overall health, greater cognitive functioning, higher life satisfaction, increased mobility/functioning and longer lifespans, according to the Four Pillars report, citing research from the International Journal of Aging and Human Development. So, by volunteering and getting involved in community activities, you’ll not only be helping others, but also yourself.
Being financially secure – During the pandemic, retirees fared better than other demographic groups because they had stronger financial safety nets, including Social Security, Medicare and a high degree of home ownership. Still, just 56% of men and 40% of women are confident about their retirement savings, according to the Four Pillars survey. So, if you haven’t yet retired, you’ll still want to bolster your finances by contributing as much as you can to your investment accounts. And once you do retire, you’ll want to make sure you don’t take too much from these accounts too soon, helping you avoid the risk of outliving your money.
As you can see, it’s important to take a holistic approach to retirement in the 21st century. And when you do, you can find your days as a retiree to be greatly fulfilling.
This article was written by Edward Jones for use by your local financial advisor, Karen Bolin. For more information, contact Karen at 503-356-1190.