How to use this tool
How to use this tool
Redefining Retirement
by Dena Frenkel (Write for us!)
(Click on the links within the article to get definition of that word)
(Click on the links within the article to get definition of that word)
We are an aging population, yet even as more of us grow older
we have become more active and are embracing the future with a passion rarely seen in previous generations. At the turn of the 20th century, the average life expectancy was 47 years. Today, the average American will live approximately 77 years. The trend is expected to continue and by 2040, among individuals who reach age 65, average life expectancy is projected to rise from 81 to 85 for men and from 84 to 88 for women, according to the National Center for Health Statistics.
Simultaneously, as we are enjoying medical advances and living healthier lifestyles that are contributing to these longer life spans, the largest portion of our population is nearing retirement. In fact, this year, 78 million baby boomers are between the ages of 41 and 59. At the end of 2005, the oldest baby boomers will begin turning 60 years old and this group is starting a new trend - seeing retirement as a new beginning rather than an ending. Furthermore, in the next decade, the number of Americans between 55 and 64 years old will increase 33 percent to 40 million while the number of people between 65 and 69 will increase 54 percent to almost 16 million, according to The American Association of Retired Persons (AARP.)
This generation of baby boomers will help redefine how our society thinks of its retirement years. The aging of America and these demographic changes are causing an "age wave", which will transform every aspect of our personal, social, financial and political lives, according to Dr. Ken Dychtwald, psychologist and gerontologist. But we should not expect people to enter into a 30-year retirement in the traditional sense of the word. According to Dychtwald, longer, healthier lives means new definitions of the life cycles. No longer are people expected to first go through their education, then work and then retire. Now, the opportunities to continue working or to go back to school do not end with retirement as they usually did in the past. The old, linear life model is being replaced with a cyclical approach including short-term retirements, followed by any combination of career shifts, part or flex-time work, entrepreneurial endeavors and continuing education. In fact, about 30 percent of people over 65 are currently in the labor force and that percentage is expected to increase to 37 percent by 2015, according to the Bureau of Labor Statistics, 2000.
These statistics support the belief that as boomers pass through their middle years and maturity, some key factors are reshaping how they live:
This information is provided for informational purposes only. The information is intended to be generic in nature and should not be applied or relied upon in any particular situation without the advice of your tax, legal and/or your financial advisor. The views expressed may not be suitable for every situation. American Express Financial Advisors Inc. Member NASD. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer.
Simultaneously, as we are enjoying medical advances and living healthier lifestyles that are contributing to these longer life spans, the largest portion of our population is nearing retirement. In fact, this year, 78 million baby boomers are between the ages of 41 and 59. At the end of 2005, the oldest baby boomers will begin turning 60 years old and this group is starting a new trend - seeing retirement as a new beginning rather than an ending. Furthermore, in the next decade, the number of Americans between 55 and 64 years old will increase 33 percent to 40 million while the number of people between 65 and 69 will increase 54 percent to almost 16 million, according to The American Association of Retired Persons (AARP.)
This generation of baby boomers will help redefine how our society thinks of its retirement years. The aging of America and these demographic changes are causing an "age wave", which will transform every aspect of our personal, social, financial and political lives, according to Dr. Ken Dychtwald, psychologist and gerontologist. But we should not expect people to enter into a 30-year retirement in the traditional sense of the word. According to Dychtwald, longer, healthier lives means new definitions of the life cycles. No longer are people expected to first go through their education, then work and then retire. Now, the opportunities to continue working or to go back to school do not end with retirement as they usually did in the past. The old, linear life model is being replaced with a cyclical approach including short-term retirements, followed by any combination of career shifts, part or flex-time work, entrepreneurial endeavors and continuing education. In fact, about 30 percent of people over 65 are currently in the labor force and that percentage is expected to increase to 37 percent by 2015, according to the Bureau of Labor Statistics, 2000.
These statistics support the belief that as boomers pass through their middle years and maturity, some key factors are reshaping how they live:
- Concern about the onset of chronic disease and the desire to do whatever is possible to postpone physical aging.
- Entry into new adult life stages including empty-nesting, care-giving, widowhood and retirement - each with its own challenges and opportunities.
- A psychological shift from acquiring more material possessions toward a desire to pursue enjoyable and satisfying experiences.
- Create or update your financial plan - Seek the help of a qualified financial advisor to create a roadmap for your future. If you have a plan, be sure to update it and adjust it frequently to assure you remain on track with changing plans and goals. Websites that offer a variety of planning resources include www.aarp.com, www.getadvice.com and many others.
- Save, save, save - Even if it's late in the game, take control and get started now. Less than 50 percent of working Americans have a pension plan at their workplace, according to AARP. That means less than half of all private sector workers have a regular payroll deduction mechanism to save for their future.
- Don't ignore the rising costs or healthcare - For many, healthcare costs are increasing by double digits annually and insurers are reducing offerings, raising prices and shifting costs. In addition, many employers are cutting back on employee health benefits and retiree health benefits. According to AARP, retirees are paying larger and larger portions of their post-work income for health care. Even with Medicare eligibility, the average older American is spending nearly one third of their income on health care, according to AARP.
This information is provided for informational purposes only. The information is intended to be generic in nature and should not be applied or relied upon in any particular situation without the advice of your tax, legal and/or your financial advisor. The views expressed may not be suitable for every situation. American Express Financial Advisors Inc. Member NASD. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer.
Email this Article
Print this Article
Cite this Article
Other Suggested Articles
The New Face of Retirement Planning >
Increasing Life Expectancies May Require Additional Retirement and Estate Planning >
Trends in Retirement >
Re-Inventing Retirement >
Other Articles By This Author
Putting on Heirs-Who Inherits your Retirement Assets? >
Measuring Your Nest Egg >
Baby Boomers Gain Access to Retirement Accounts >
Boomers Pioneer a New Kind of Retirement >
Dueling Goals: Saving For College and Retirement >
Income Growth with Dividends >
Understanding the Tax Ramifications of an Inherited Roth IRA >
Women Face Unique Retirement Challenges >
Ten Financial Tips for Women >
Article reprinted with permission. Unauthorized reproduction of this content is prohibited.
Click here to license InvestorGuide University content.
Click here to license InvestorGuide University content.
