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Addressing fears about how to spend time in retirement and providing retirees with a clear sense of purpose and meaning are key to attracting high net worth consumers to life plan communities, according to the results of a recent survey.
Savant Wealth Management and Absolute Engagement collaborated on an online survey of 750 high net wealth investors in April and May in a discussion on their changing expectations on retirement living. The survey covered retirement timing, the pandemic’s effects on retirement plans, and retirement visions.
The industry can use key findings to develop lifestyle programming, marketing materials and financial planning resources to help these individuals find a clear path forward to a productive retirement in life plan communities, according to the authors.
“We found that while many respondents are thinking differently about the future as a result of the pandemic, their attitudes toward the traditional concept of retirement were already evolving and continue to change,” the report authors wrote. “Based on this research and what we’ve observed, we believe that the concept of retirement — and even the word itself — could soon be irrelevant.”
Preferring ‘retirement’
Although “retirement” is still the preferred term for this time period among respondents — 60% overall said they prefer, along with 74% of those aged 75 and older and 71% of individuals aged 65 to 74 — 26% refer to retirement as their “next chapter.” Other preferred terms were “second act” (6%) and “encore career” (5%). If given the choice, in fact, some respondents said they might opt for a period of non-work or part-time work throughout their lives rather than at the end, according to the authors.
Overall, 54% of survey respondents said they have a traditional view of retirement: fully stopping any form of paid or unpaid work. The remaining 46% said they would take a “glide path” approach to retirement by transitioning either to part-time or volunteer work first.
“The data suggest that the textbook definition of retirement no longer is a good description of how people want to spend this phase in life,” the authors wrote. “They may want more control and flexibility in the work they perform, and they are open to new options — especially when the runway to retirement is longer.”
Retirement barriers
When asked about barriers to retirement, most respondents said they fear income loss (52%), trying something new (42%) and losing health insurance (28%).
Of those who changed their retirement plans due to the pandemic, respondents under age 45 and those between 65 and 74 years old were most likely to say they would work longer than planned. But those in the 45-to-54 age range said that the pandemic made them want to retire earlier than planned.
The data also shed light on “false start” or “failed retirements.” Almost 20% of participants said they retired in the past only to decide to return to the workforce. Just more than a third said they were financially ready for treatment but not personally ready (36%), whereas others cited an inability to move on from full-time work (34%), feeling unfulfilled (28%), having too much free time (27%) or having no sense of purpose (26%).
“Americans are planning for — or hoping for — a different way to transition from full-time work to a different phase of their lives,” the authors wrote. “Our research shows people are questioning the path their parents took, asking different questions about the future and, as a result, redefining the idea of retirement altogether.”
