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3
AgendaOver-all:• To describe the new realities of retirement American
style
To show:• How this new batch of later-life Americans is different
from its forebears.• How these differences are best described and
understood.• Why these differences are taking root in our culture• Why many are likely to endure.• What these differences mean for financial planning.
5
Baby Boomer Realities•Big numbers:
▫78 Million strong▫Retiring at a rate of 10,000 a day
•Long Duration:▫The next 18 years
•Cultural Change: ▫Boomers shaped American culture at every
stage of their lives▫Boomers already shaping a new life stage
once called “retirement”
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Longevity Technology-Driven Change
1. Medical & pharmaceutical research: e.g., antibiotics for TB, whooping cough; penicillin.
2. Medical instruments: X-Ray, MRI.3. Improved practices: public health,
safer food, water, driving; worker safety; reduced smoking; organ transplants.
7Technology
Direct Impact
s
Spill-over EffectsCultural Changes
Compass Map-making
Increased safety permitted larger ships, sailing in all kinds of weather, expanded global trade, exploration.
Steam engine
Powered machines
Industrial revolution, railroads, steamships, faster communications, increased trade.
Railroad Pullman sleeping car,air brakes
Led to creation of time zones, demographic decentralization, opened interior regions for economic development.
Automobile Paved roads, electric start,rubber tires
More personal freedom, democratized destination recreation, suburbs, sprawl, fast food, motels.
Antibiotics Greatlyincreased longevity
People work longer, retire later; post-career life has more stages, lifestyles, transitions, catalysts; crisis for welfare state.
Microchip Faster, cheaper computing
Anytime, anywhere communications, blending of workplace and home life, massive creative destruction, new distributed business models.
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Evolving Views of Retirement•1935-1960: Winding Down Years
▫A short period of rest – measured in months or a few years – after a life of work.
•1960-2005: Golden Years▫Years, even decades, of leisure and
amusement supported by savings, expanding entitlements.
•2005-present: Kaleidoscope years▫A new chapter in life including varieties of
work that are productive and satisfying + leisure.
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Note: Only two (in green) of the top six concerns are financial. Source: Harris Interactive, 2011.
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Cascading Impacts of Longevity Are Dramatic
• A variety of lifestyles • Lived out in stages• Triggered by catalysts• Each requiring a new script
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Longevity in YearsChances that one of a 65 year-old married couple will live to:
▫85 years ≈ 3 out of 4 – 75%▫90 years ≈ 1 out of 2 – 50%▫95 years ≈ 1 out of 5 – 20%
Source: The Wall St. Journal, 2011. http://bit.ly/yhDKjW
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Longevity Requires New Scripts for Life
• Infancy to first day at school - Parents, siblings, extended family•K-12 through college - Peers, teachers, school, culture•Working years to retirement - Partner, bosses, family, job requirements
15
New Life ScriptsMust be centered on
Continued Social Engagement
Using gifts of Time
Talent Treasure
17
Lifestyle ChangesBoomers exchange “Golden Years” of endless leisure and amusement for a second act that includes working.
• 70% ± anticipate working in some manner their post-career years.
• Number rises to 77% in the 55-64 age demographic
• 54% will work as a choice, not a requirement.
Source: Harris Interactive, 2011
18
Post-Career Work1. Paid work2. Volunteer work3. In-kind work4. Samaritan work5. Enrichment work6. Reflect and restore7. Rest & relaxation
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Retirement LifestylesSun Financial Merrill Lynch•Ageless Explorers•Cautiously
Contents•Live for Todays•Worried Strugglers
•Empowered Trailblazers
•Wealth-Builders•Leisure Lifers•Anxious Idealists•Stretched and
Stressed
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Retirement Lifestyles (cont.)TransAmerica Lincoln Financial•Venturer•Anchored•Pursuer•Adapter
•The Instructor •The Volunteer•The Entrepreneur •The Adventurer•The Enthusiast
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1. Pre-retirement
2. Retirement Event
3. Honeymoon
4. Rest & Relaxation
5. Letdown
6. Reorientation
7. Routine
Stages of Retirement
22
Catalysts•Trigger a “turn” of life’s kaleidoscope
•Lead to life transitions
•Motivate, require, incent, nudge
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Life Transition CatalystsChallenges Opportunities
Divorce Marriage
Unemployment Becoming parents
Care of a parent Buying/selling a home
Long-term care Buying/selling a business
Loss of a loved one Receiving an inheritance
Personal injury The retirement event
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Types of Catalysts•Economic catalysts
▫Macro-economic change: recession, inflation, etc.▫Loss of job or under-employment
• Health-related catalysts▫Declining health▫Disability: physical, mental
• Psychological/spiritual catalysts ▫Loss of identity, purpose, status▫Later-life marriage/divorce
• Lifestyle catalysts ▫Empty nest, grand parenthood▫ Inheritance
25Type →Control ↓
Catalysts that are Opportunities
Catalysts that areChallenges
GenerallyUnder YourControl
Preparation for retirementPost-career changes:• work• enrichment• leisure, recreationDownsizing/rightsizingAge-relevant fitnessLater-life marriage
Loss of purposeLoss of identityRelocation – e.g., to • a new community• institutional care• home of childrenLater-life divorce
Generally Beyond YourControl
The retirement eventThe empty nestBecoming grandparentsReceiving an inheritanceComing to faith
Later-life losses • employment• income• power, status Care-giving for parentLoss of a loved oneDisabilityLoss of faithLater-life divorce
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Ray’s Post-Career ScriptDay Activity
DescriptionReboot Activity
TypeMonday Photography; family
albums, memoir.Enrichment Work
Tuesday Volunteer advisor for SCORE
Volunteer Work
Wednesday
Fee-based consulting Paid Work
Thursday Recreation-fishing, sailing, kayaking, golf.
Leisure
Friday Home maintenance, special projects, day trips
Enrichment
Saturday Home time, neighbors, relatives
Leisure
Sunday Church; home time, neighbors, relatives
Reflect