Has the Pandemic Affected the Retirement Mind-set?
Each year, the Transamerica Center for Retirement Studies surveys baby boomers, Gen Xers, and millennials to gauge their perceptions about retiring. The 2020 survey, conducted in April, studied the impact of the COVID-19 pandemic and how it may have affected their outlooks.
Overall, 53% of respondents said that their confidence about retiring remained the same during this spring’s economic turbulence. Twenty-three percent indicated they were less confident about their retirement prospects; an additional 13% said that they had grown more confident.
Nearly half (45%) of all respondents believed that they would be able to transition to part-time work en route to retirement; 61% expected that their employers would provide them with full employee benefits, even while working part time.
Fifty-two percent of all respondents believed that they would keep working past age 65, and 68% of baby boomers indicated that they planned to work or were working at 65 or later.
Fewer baby boomers and Gen Xers (13%) had been laid off this spring compared to millennials (18%).
Retirement saving was still the number one financial priority in life for both Gen Xers and baby boomers alike, though the percentage of respondents saying so declined from the 2019 survey (23% to 20% for Gen Xers and 40% to 32% for boomers).
In an encouraging sign for the current generation of retirees, 25% of the boomers surveyed indicated that they were debt-free.[1]
Strengthen Your Psychological Portfolio for the Future
Your investments are an important aspect of your retirement strategy. Stepping back from the purely financial, so is your psychological portfolio—your mental readiness for the next phase of your life.
Preparing for retirement also means readying yourself to explore new opportunities and pursuits, and new friendships or relationships, perhaps even a new sense of purpose.
For some retirees, this is relatively easy. For others, it takes time and reflection, which is why it may be useful to think about it before selling your business or concluding your career.
Today, only a minority of workers are making phased transitions into retirement, and some are retiring earlier than they had expected. So, think today about what your daily life might be like once you are retired—not just the days filled with adventures and trips, but also your daily routine.
Keep in mind that your retirement may evolve over the years. New hobbies, pursuits, relationships, and challenges might make you rethink how you spend your time and even how you view yourself.[2]
Keep in mind: This article is for informational purposes only. It’s not a replacement for real-life advice, so make sure to consult a financial professional before modifying your retirement strategy. Also, please consult your tax or legal professional before making any decisions regarding the sale of a business.
On the Bright Side
The stock market just came off its best quarter since 1998. The S&P 500 advanced 19.95% across April, May, and June.[3]
The S&P 500 Composite Index is an unmanaged index generally considered representative of the U.S. stock market. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. Investing involves risk, and the return and principal value of stock prices will fluctuate as market conditions change. Shares, when sold, may be worth more or less than their original cost.
Securities offered through Cambridge Investment Research, Inc. a Broker/Dealer, member FINRA/SIPC. Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Lighthouse Financial, LLC and Cambridge are not affiliated.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.
Citations
1 – Transamerica Center for Retirement Studies, May 2020
2 – Barron’s, November 30, 2019
3 – CNBC.com, June 30, 2020