The Changing Reality of Retirement in 2024: Summary of Research
Many who are watching the changing reality of retirement in the U.S. in 2024 call it a crisis. According to CNN, “Retirement crisis looms as Americans struggle to save.” The Hill adds, “10 reasons we must urgently get over our retirement crisis denial.” A 2024 survey by the National Institute on Retirement Security found: “When asked if the nation faces a retirement crisis, 79 percent of Americans agree there indeed is a retirement crisis, up from 67 percent in 2020.”
These days, when people refer to a retirement crisis, they generally point to the fact that record numbers of people are retiring without adequate financial resources to live in the way in which they have been accustomed. In February 2024, the National Council on Aging found that “more than 17 million older adults age 65+ are economically insecure.” Indeed, “millions of older adults [are] struggling to meet their monthly expenses.” According to Robert Shapiro, a former U.S. Undersecretary of Commerce, “America has never seen so many people reaching retirement age over a short period, and well over half of them will find it challenging to meet their needs through their retirements, let alone maintain their current standard of living” (see article by AARP).
Not to minimize the economic challenges of retirement, I would suggest that our retirement crisis isn’t only financial. It’s actually more complex, having to do with changing circumstances, changing lifespans, changing desires, changing obstacles, and a changing sense of what makes life meaningful as we get older.
As part of my third third work, I try to keep track of what’s in the news when it comes to comes to anything related to the third third of life. So far in 2024, I have found an impressive array of articles focusing on some aspect of retirement. These articles support my contention that our retirement crisis isn’t only financial. Here are some recent examples.
Retirement Insecurity 2024: Americans’ Views of Retirement, from the National Institute on Retirement Security, Feb 2024 (link).
“The ground is shifting when it comes to retirement. Americans are experiencing increased financial pressures and low levels of retirement savings.”
“The fastest-growing segment of the workforce? Not Gen Z,” Mercer, April 11, 2024 (link)
“In the last 100 years, the 65+ age group has grown five times faster than the rest of the population. What’s even more surprising are projections that people aged 75+ will constitute the fastest-growing age band in the civilian workforce between now and 2030!”
“In this conversation, Dr. Yeh debunks common myths about older workers – including their inability to use technology to perform essential job functions. In fact, studies show that age-diverse workforces contribute to increased revenue and profit margins – perhaps not surprising given that people 50 and older, contribute $8.3 trillion dollars to the economy. At the same time, working later in life can provide seniors with purpose and social connections, both essential to health and happiness.”
“The C.E.O.s Who Just Won’t Quit,” New York Times, May 9, 2024 (link).
“Of the many riddles that confront corporate chief executives in the course of their work, perhaps the most important is when to quit. It’s the maneuver that cements a C.E.O.’s legacy. The cost of overstaying is steep, especially when tallied in missed opportunities.”
“And now, perhaps inevitably, workers of all kinds and levels say they are going to defer retirement. That’s especially true of striving and hard-driving institutional leaders.”
“People say, ‘Well, I love what I do — will I ever love anything else as much?’” Ballmer, now 68, [former CEO of Microsoft] told me recently. “The message I would have for people is that it is an abyss.”
“These Couples Survived a Lot. Then Came Retirement,” New York Times, May 5, 2024 (link).
This article tells the stories of many married couples for whom retirement puts a major stress on their relationship. For example, Joe and Barbara “had time; they had money, they had leisure. They also had a problem: They were driving each other mad.”
“Although it’s still rare for married couples over 60 to break up, the divorce rate is rising faster in that age group than in any other.”
“Not surprising, researchers in 2020 found that couples who reported high levels of that kind of reinforcement — encouraging each other to try something new, for example — were happier and were weathering the transition much better.”
“About 1 in 4 US Adults 50 and older who aren’t yet retired expect to never retire, AARP study finds,” AP, April 24, 2024 (link).
About one-quarter of U.S. adults age 50 and older who are not yet retired say they expect to never retire and 70% are concerned about prices rising faster than their income, an AARP survey finds.
“‘Zapped time and time again’: More workers say the expect to retire at 65, but research shows they may be overly optimistic about how long they can remain in the workforce,” apmoneywise, May 4, 2024 (link).
“Half of retirees surveyed in the EBRI [Employee Benefit Research Institute] report said they retired earlier than planned and nearly 70% point to reasons outside of their control, such as health issues, layoffs or the need to provide care for family members.”
“While three-quarters of workers in the EBRI study say they expect to continue working in retirement, only 30% of retirees actually do.”
“A solution to the retirement crisis? Americans should work for more years, BlackRock CEO says,” CBS News, April 18, 2024 (link).
“With Americans living longer and spending more years in retirement, the nation's changing demographics are ‘putting the U.S. retirement system under immense strain,’ according to BlackRock CEO Larry Fink in his annual shareholder letter.
One way to fix it, he suggests, is for Americans to consider working longer before they head into retirement.
‘No one should have to work longer than they want to. But I do think it's a bit crazy that our anchor idea for the right retirement age — 65 years old — originates from the time of the Ottoman Empire.’
‘We should want more people to live more years. But we can't overlook the massive impact on the country's retirement system.’
“What’s the Average Retirement Age? Factors, Trends, and Variations,” Investopedia, March 13, 2024 (link).
“The average retirement age in the United States is 61 to 64 years old (depending on the data you use). A recent Gallup survey says it’s 61, but the Center for Retirement Research at Boston College says it’s 64.7 for men and 62.1 for women.”
“One thing is certain: The average retirement age is up from 57 in the 1990s.”
“Your Neighbors Are Retiring in Their 30s. Why Can’t You?” New York Times, May 7, 2024 (link).
This article focus on the FIRE movement and some of its proponents. FIRE stands for “Financial Independence Retire Early.”
“According to a 2023 survey, one-quarter of Americans would like to retire before age 50. After decades of tolerating workaholic culture as the norm, employees are tired, unafraid to show it and yearning to yank back control of their lives. To fed-up workers willing to do a little bit of math, FIRE offers a straightforward antidote: You can just leave it all behind.”
“Life after early retirement: the elephant in the room. What to do after the cruises, the skydiving, the teetering stack of books on the night stand? The main danger of FIRE is that you might be running hard away from something rather than toward it — that you’re propelled only by the too-nebulous idea of escape.”
“For those who succeed at early retirement, especially at the FatFIRE level [luxurious retirement], a surprise depression can set in.”
2024 MassMutual Retirement Happiness Study (link).
“While happiness is found in retirement, pre-retirees may have unrealistic expectations about the level of happiness and excitement they will experience.”
“In contrast to current retirees, most pre-retirees don’t see retirement as an end to work, instead expecting retirement to bring either a shift in focus or less work.”
“The definition of retirement may be shifting to mean more than simply an end to working. A majority of pre-retirees view retirement as either shifting focus to ‘a new type of work or fulfilling purpose’ or ‘working less.’”
“Many retirees [48%] retired earlier than planned. Few say they retired later than planned.”
“Pre-retirees anticipate that when they retire, they will feel higher levels of relaxation, happiness and excitement, and lower levels of stress. While pre-retiree expectations around relaxation and stress levels align with what current retirees report, pre-retirees may be overstating how much happier and excited they will feel on a typical day in retirement.”
“Many retirees who are not happier in retirement admit to experiencing loneliness.”
“Many retirees say they overestimated more negative possibilities of retirement (i.e., level of boredom, financial problems) and underestimated some more positive possibilities (i.e., spending time how they want, time with family and friends).”
Whereas 79% of pre-retirees and 55% of retirees see travel as a major activity of retirement, only 44% of pre-retirees and 22% of retirees regard volunteering as central to retirement.
“Nearly half of Americans expect slow transition into retirement,” Allianz Life, May 7, 2024 (link).
“47% of Americans say they think about retirement as a slow transition away from full-time work.”
“68% say people should expect to work later in life in order to have enough money to retire.”
“15% say they don’t see themselves ever slowing down or retiring.”
In addition to these articles, a book published in February 2024 makes a strong case against retirement. In Unretired: How Highly Effective People Live Happily Ever After, Mark S. Walton writes (link):
“Retiring from work is not right for everybody—in fact, for a solid majority of people, it can turn out to be a seriously bad idea” (p. 22).
“. . . for many people, particularly those who enjoyed and were effective in their work lives, retirement is a stage of life filled with losses from which it can be difficult, if not impossible, to recover. The most common of these losses are: personal identity, sense of purpose, daily structure, friends & social network” (p. 23).
“According to Marc Freedman, people who retire ‘should work for or create nonprofit organizations that would provide them with “passion, purpose and a paycheck,’ while tackling some of society’s biggest challenges” (p. 71).
Summarizing the groundbreaking work of neuroscientist Elkhonon Goldberg, Walton writes, “This is the central paradox of the older brain, he asserted—while some mental processes, such as memory, may become more difficult, new strengths and abilities emerge” (p. 87).
“In practical terms then, this seems to prove that no matter your field, experience seriously matters. That the brain of an older, experienced professional possesses strengths and assets that it lacked decades earlier, and that younger professionals do not yet have” (p. 89).