Unlock the Secret to a Blissful Life: The Surprising Connection Between Retirement Planning and Well-Being!

How Planning Your Retirement Can Transform Your Overall Happiness

A recent study by MIT AgeLab and Transamerica found that the typical way we plan for our finances falls short due to Americans living longer. The study, involving about 1,200 people and 10 focus groups, shows that the usual three-step plan of education, work, and retirement doesn’t consider our increasing life expectancy. The researchers suggest a simpler, more effective approach — focusing on three main things throughout adulthood: well-being, work, and finances. This way, we can adapt our plans to match the reality of longer lifespans and ensure a more comprehensive and suitable financial strategy.

Want to LEARN MORE about CHOOSING A GOOD ADVISOR? SUBSCRIBE TO MY YOUTUBE CHANNEL!

Longevity is Growing…

The longevity of Americans has significantly increased compared to previous generations. In 1950, the average life expectancy was 68 years, but by 2009, it had risen to nearly 79 years. Longer lifespans also mean extended retirement periods. For instance, in 1970, a man retiring could expect less than 13 years in retirement, while in 2020, the average retirement span for men was almost 19 years. If someone turns 65 in 2023, there’s a 50% chance they will live for another two decades, highlighting the evolving landscape of longer, more extended retirements.

The trend of longer lifespans is anticipated to persist. In 2020, there were about 92,000 individuals in their eighties in America, and this number is projected to nearly triple in less than 25 years. By 2045, it’s estimated that there will be around 270,000 Americans aged 100 or older. In practical terms, if individuals retire at 67, they might potentially experience as much as 33 years in retirement, underscoring the significant shift towards more extended periods of post-work life.

Let’s Put 33 years into perspective. In 1990, George H. W. Bush served as president, Madonna dominated the music charts, and the leading TV show was “Cheers.” Reflecting on these cultural and political landmarks underscores the substantial stretch of time encompassed by a potential 33-year retirement period.

Dr. Joseph Coughlin, Director of MIT AgeLab, emphasizes that although Americans generally hold an optimistic outlook for their future, there might be a lack of full awareness regarding the dynamic nature of their financial needs, priorities, and life circumstances over time. Planning for longevity, according to Dr. Coughlin, requires a nuanced approach — understanding and adapting to what matters most at each stage of adulthood, striking a balance, and aligning priorities with behaviors and actions that pave the way for a more secure and fulfilling future.

How Longevity Can Affect Planning for Retirement

Phil Eckman, President of Workplace Solutions at Transamerica, notes a significant shift in how people navigate their lives and careers. According to Eckman, there is a changing paradigm where individuals increasingly seek flexibility and choice, not only in the professional sphere but also in their personal lives. This evolving mindset reflects a broader desire for autonomy and adaptability, emphasizing the importance of options both in the workplace and at home.

Historically, traditional financial planning centered on a relatively brief retirement period, emphasizing the importance of building a nest egg to fund what was then considered a shorter retirement. However, with the substantial increase in the length of retirement, the current phase of life is far more dynamic. The focus has shifted from leisure-centric planning to a more multifaceted approach that considers the diverse aspects of an extended post-work life.

For People in Their 60s and 70s

The report underscores that in older adulthood, individuals may start to enjoy the fruition of their savings towards cherished goals, such as dream vacations or increased time with family. However, it emphasizes the importance of being prepared for a more extended time horizon, as many could potentially live for several more decades beyond this celebratory phase. This suggests a need for continued financial foresight and planning well into the later stages of life.

Retirees can benefit from viewing investment advisors and portfolio managers as coaches who guide them through the intricacies of this later stage of life. An Investment advisor Portfolio Manager can serve as a valuable resource in helping retirees comprehend the complexities involved. Moreover, advisors may play a crucial role in assisting individuals in prioritizing aspects like social, emotional, and physical well-being over financial or work-related goals during the next 10 years of their lives, as outlined in the report. This approach acknowledges the holistic nature of retirement planning beyond just financial considerations.

For People in Their 40s and 50s

Midlife adults encounter a myriad of complex and emotional challenges, ranging from career advancement to the responsibilities of caring for both children and aging parents. Given the diverse set of challenges, it’s understandable that this demographic reports the lowest exercise rates and less frequent adherence to healthy eating habits compared to other age groups. An important takeaway is that individuals in this cohort should collaborate with their investment advisors and portfolio managers to strategically prioritize various aspects of their lives. This ensures a holistic approach to self-care, encompassing both financial well-being and other crucial aspects of personal health and fulfillment.

The report highlights the role of financial professionals as agenda setters for clients in midlife, assisting them in foreseeing future needs, challenges, and celebratory milestones. Specifically, financial professionals can provide support for clients currently in caregiving roles, all while guiding them to anticipate a future stage in life when they may themselves require care. This proactive approach acknowledges the evolving nature of personal and financial needs, emphasizing the importance of thoughtful planning and preparation for various life stages.

For People in Their 20s and 30s

The study also uncovered that individuals in this age group are notably motivated to invest in their overall well-being. Simultaneously, they are keen on establishing themselves in their careers both in the short and long term, and they actively initiate savings for significant financial milestones. This suggests a proactive and forward-thinking approach among this cohort, emphasizing a commitment to personal growth, financial stability, and long-term planning.

Younger adults stand to gain by seeking the guidance of investment advisors and portfolio managers to cultivate new habits, establish effective routines, and adopt attitudes that lay the groundwork for both immediate and long-term future success. Collaborating with investment advisors and portfolio managers advisors can also assist them in constructing a robust emergency fund and gradually building their net worth. This proactive engagement with financial professionals enables younger adults to develop sound financial practices and strategies that contribute to their overall financial well-being over time.

Bottom Line

Retirement transcends mere financial considerations. With longer lifespans, the retirement landscape has become more dynamic, shifting away from the leisure-centric focus of previous generations. Today, it’s about holistic well-being, encompassing relationships, personal goals, health, and avocational opportunities, in addition to having a sufficient nest egg. The report underscores that seeking financial advice in each phase of adulthood is crucial for achieving a retirement characterized by overall well-being. This approach recognizes the multidimensional nature of retirement planning, emphasizing the importance of comprehensive guidance across various aspects of life.

Have Questions? Contact us!

We’ve assisted our clients through every stage of life. Even when you’re not aware that something might impact your financial future, it likely will to some extent. Engaging in a conversation with your investment advisor about any financial changes is an excellent approach to keeping your financial goals in focus.

We have expertise in cross-border wealth management. Don’t hesitate to reach out to us — we’re committed to providing tailored solutions for your cross-border financial needs.

For more information or to connect with me, you can reach out via email at [email protected] or get to know me better by exploring my engaging video content on YouTube https://www.youtube.com/@joemacek.

I share valuable insights and discussions on financial planning, market commentary, and investing concepts that can further enrich your understanding. Join me on my channel to discover more!

Don’t hesitate to reach out today at 1–888–324–4259 to discover more about how we can help you achieve your investment milestones.

Joe A. Macek, FMA, CIM, DMS, FCSI

Investment Advisor, Portfolio Manager

iA Private Wealth | iA Private Wealth USA

Toll Free North America: 1–888–324–4259

Email: [email protected]

238 Portage Ave, 3rd Floor

Winnipeg, Manitoba R3C 0B1

26 Wellington Street East, Suite 700

Toronto, Ontario M5E 1S2

iA Private Wealth is a member of IIROC and the Canadian Investor Protection Fund. iA Private Wealth (USA) Inc. is a registered investment adviser with the SEC. This platform is solely for informational purposes. Investing involves risk and possible loss of principal capital. Comments by viewers or third-party rankings and recognitions are no guarantee of future investment outcomes and do not ensure that a viewer will experience a higher level of performance or results. Public comments posted on this site are not selected, amended, deleted, or sorted in any way. If applicable, certain editing of personal identifiable information and misinformation may be deleted. Adviser believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact, or misleading information. This content may be dated. Please visit the following page for further disclosures related to iA Private Wealth (USA) Inc.: www.iaprivatewealthusa.com