Retirement continues to change from one generation to the next — everything from the average age of retirement to how we save and plan for it. The goal will always be to retire without the stress of financial security or decreased quality of life. Most of us would like to enjoy a more fulfilling quality of life. While there are many factors at play, here are a few thoughts on what retirement may look like 100 years from now.
Life Expectancy Will Continue to Increase
The average life expectancy in the United States is 76 years. By 2050 it is expected to be 84 years, and, 100 years from now, it is likely to surpass 100 years. The average age at which one retires will continue to increase as life expectancy increases. With Baby Boomers retiring at a rate of 10,000 per day, without a drastic reorganization Social Security will be obsolete in the 2030s. Even those who wish to retire early may need to continue working to support their longer lifespan. However, just like today, with a longer life expectancy, many will want to continue to work late into their 70s and 80s.
Downshifted Careers Will Become a Norm
While retirement will be less likely for most in their mid-60s, downshifted careers or major career changeswill likely become the norm for adults in the second half of their life. The reasons for this will vary:
Life expectancy may be longer, but physical and mental decline may force a career change.
Those who work in demanding fields may simply want to switch to a career that requires less time and travel.
Proactive adults who have paid off their debt and saved responsibly for their retirement may still need to work, but they may opt to transition to a career with a lower salary — and a lower stress level.
Adults who enjoy the mental stimulation and social aspects of work may choose a downshifted career, such as freelancing or contract-based work, to keep working because they simply want to do so.
Retirement Planning Will Continue to Evolve
Without major changes in the next few years, Social Security will be a distant memory 100 years from now. In our lifetime, it is also likely that we will see pensions become obsolete, and, if not obsolete, drastically different than our grandparents’ generation. This means retirement must be primarily self-funded. Even with the future equivalent of 401ks, IRAs and pension plans, there will be a greater need for cold, hard cash. This is likely to change the financial decisions young adults make early in their careers. With growing trends in renting vs. buying, living in tiny homes, minimalism and retiring in countries where the U.S. dollar goes further, we are already seeing a shift toward the preview of what may be to come.
Only time will tell what retirement will look like 100 years from now. One thing for certain is self-driven retirement planning is far more a priority today than ever before. Ideally, planning should begin in your late 20s or early 30s. Linden Oak is here to help you diversify and fine tune your retirement plan at any stage of the game. Reach out today to schedule your initial consultation.
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