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Saturday, May 25, 2024

Redefining the ideal retirement

Key takeaways

  • Over half (58%) of Americans (64% of Baby Boomers and Gen Xers) say they may be in the job market post-retirement and are open to working indefinitely.
  • Top reasons for working as a retiree include personal fulfillment (41%) and having a sense of purpose (37%), just as much as potential financial needs (40%).
  • People remain concerned by economic factors like inflation (52%), running out of money (51%), and unexpected expenses (49%).
  • Florida remains the top domestic location to retire, while Italy is the most desired international retirement destination.

09.20.2023

Reality sets in: Today’s new face of retirement

It’s the question everyone will ask themselves at some point during their life: “When will I be able to retire?” But some Americans are taking a different approach, and a retirement where people completely stop working, may be a thing of the past.

According to new research from Empower, over half (58%) of Americans (64% of Baby Boomers and Gen Xers) may be in the job market post-retirement and are open to working indefinitely – but the reasons aren’t purely financial. Would-be working retirees are motivated by values like personal fulfillment (41%) and having a sense of purpose (37%), just as much as potential financial needs (40%).

To explore what defines the ideal retirement in America, we surveyed over 1,000 adults about their views on living locations, activities, and concerns. Let’s dive into their plans and goals below.

Top retirement concerns

Americans’ biggest worries about retirement include:

  • Inflation (52%)
  • Insufficient savings or running out of money (51%)
  • Unexpected expenses (49%)
  • Healthcare costs (44%)
  • Affordability of housing (37%)

To financially prepare for retirement, most respondents (56%) pointed to having a 401(k) as the top way to save. Setting up a solid financial and retirement plan can help people anticipate these forces and set Americans on the path to a secure future.

Selecting the perfect place to retire

Nearly one in four Americans (22%) said they want to relocate to another state in retirement, and 10% would like to move abroad (Gen Z had the most wanderlust, at 13%). Not so fast, according to nearly one-third (32%) who plan to stay put post-retirement, including 50% of boomers.

Florida was voted the most popular state for future retirees. Meanwhile, Italy was the No. 1 destination for Americans planning on an international retirement. With its beautiful scenery, affordable real estate, and high-quality healthcare, it’s easy to see why retiring in Italy is so attractive.

As for the top deciding factor when choosing a new locale, it’s not surprising that cost of living (55%) was highest on the list. Right on its heels, respondents also factored in climate (50%) and proximity to loved ones (41%) to round out the top three factors when choosing where to live.

Among those looking to retire abroad, respondents weighted the importance of these factors a bit differently:

  • Lower cost of living (70%)
  • Climate (68%)
  • A slower pace of life (55%)
  • Cultural activities (45%)
  • Healthcare access (45%)

After deciding where to live, what do Americans hope to do during retirement?

 

Move over fishing, there’s a new retirement hobby in town. According to survey results, most Americans would prefer to travel, garden, and hike in retirement. Americans were also interested in spending time in retirement to learn new skills, tinker with hobbies, and volunteer for worthy causes. Others wanted to socialize more, and some even desired to work a side hustle or start their own business.

Even so, among all respondents, the desire for a more relaxed life took center stage, with more than half (54%) looking forward to a slower pace.

Post-retirement employment: Options and benefits

With 58% of respondents open to post-retirement employment, working as a retiree was popular among Americans. However, don’t ask them to come into the office. When asked how they wanted to work, 49% said remotely, 34% were OK with a hybrid situation, and only 17% were willing to go into an office regularly. Americans’ top reasons for working after retirement were the personal fulfillment (41%) and financial need (40%).

Over three in four Americans also said working after retirement would help them to maintain a daily routine, give them a sense of purpose, and keep their minds and bodies active.

 

A future to look forward to

Defining the ideal retirement is individual and comes down to priorities, values, and goals — both financial and personal. Getting advice from a financial professional can help people create a roadmap so that when working life ends, a bold new chapter begins.

About Empower

Empower is a financial services company on a mission to empower financial freedom for all. We offer investment, wealth management, and retirement solutions for individuals and all sizes of organizations. Connect with us on empower.com.

Fair use statement

We hope you found this article about Americans’ retirement plans useful. Please share these findings for noncommercial purposes, and always provide a link to this page when doing so.

 

Methodology: Empower survey of 1,009 Americans, conducted in July 2023 by Fractl on behalf of Empower. Among respondents, 10% were baby boomers, 24% were Gen X, 56% were millennials, and 10% were Gen Z. Additionally, 47% were women, 52% were men, and 1% were nonbinary. All data referenced in this article is from the survey.

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Empower Retirement, LLC and its affiliates are not affiliated with Fractl.

Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness, or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement, responsibility, or approval by Empower of the contents on such third-party websites.

The Currency editors

Staff contributors

The CurrencyTM, a publication from Empower, covers the latest financial news and views shaping how we live, work, and play. We keep you current on ways to plan, save, and invest for life.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third-party websites. 

Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money. 

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. 

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