I have some great words of wisdom for you all today: change is unavoidable. Some recent changes that I have had to endure include sharing my food with the cat (Oliver has been stealing my food recently!) and wearing a tracker chip on my collar (apparently I have gone exploring around Ramsey, Wyckoff, Waldwick, Franklin Lakes, Mahwah, and many more, too many times). However, that does not necessarily mean that change is bad! Some great changes that I have experienced recently include eating the cat’s food (when the Taylor family has their backs turned) and invading the cat’s space (Oliver is not a fan of my takeover of the upstairs!). Sometimes I have to remind him that Bergen County is definitely big enough for the two of us!
Why is retirement changing?
Many things are changing in the world besides my diet, namely the concept of retirement! The concept of retirement is changing from a fixed point in time to a time of life where people have the freedom to continue working and have leisure time to be with family and pursue hobbies. Americans in the workforce worried about running out of money while retirees worried about maintaining quality of life (2).
What are the 3 ways in which retirement is changing
1. Family Dynamics Have Changed
Family dynamics have changed greatly over the past 50 years. In the 1960s, more than 70% of children lived with 2 parents in their first marriage. However, today less than 50% of children are living with 2 parents in their first marriage. These increasing divorces, remarriages, and single-parent households are presenting a new range of factors to consider in retirement, including, but not limited to: legacy planning, expense funding, family dynamics, and geographic considerations.
2. Life Expectancy Has Grown
Americans are living longer than ever before! By 1970, the average American life expectancy was approximately 71 years old (1). Today, that life expectancy has increased to about 79 years old. This is changing retirement because as people are living longer, they must save more money for retirement. However, the study is encouraging as it states that as people are living longer and with increased vitality, retirees are starting new businesses, remaining physically active and connecting with family and friends.
3. Medicare Expenses are Increasing
Medicare spending currently makes up 15% of the total federal budget, and that is a number that we can expect to grow larger as the program expands. According to the study, we can expect that there will be shifts towards cost-conscious care and higher premiums for pre-retirees (especially towards those who are classified as “high income”).
In conclusion, you can expect the concept of retirement and retiring to change even more in the future! If you have any questions about your retirement plan, please feel free to contact the Taylor Financial Group team.
Till next time,