Americans Overwhelmingly See Course Corrections as Essential to Thriving in Retirement, Edward Jones and Age Wave Research Reveals

Millennials say they want their parents to safeguard their own financial security vs. leaving an inheritance 

ST. LOUIS, May 17, 2023 /PRNewswire/ -- Nearly all retirees (93%) agree that preparation, flexibility and willingness to adapt are keys to success in retirement, according to the latest study from Edward Jones and Age Wave involving representative surveys with more than 12,000 North American adults across five generations. The new research report¹, "Resilient Choices: Trade-Offs, Adjustments and Course Corrections to Thrive in Retirement," explores more than 50 individual and impactful course corrections and other tips to thrive across the four pillars of the new retirement: health, family, purpose and finances.

Post-pandemic, today's retirees and pre-retirees are showing increasing resilience and a willingness to make changes and set boundaries to improve their own well-being in their longer retirements. Six in 10 Americans who plan to retire (59%) believe they can afford a comfortable and secure retirement lasting more than 10 years, and today's retirees are approaching retirement with general optimism and enthusiasm. Two-thirds of retirees (67%) and almost as many pre-retirees (62%) feel confident in their ability to handle the unexpected; however, many are eager to learn about the full range of options available to them and how much control they have over improving their lives.

Navigating Cannonballs, Curveballs and Windfalls in the New Retirement

Since retiring, a large majority of retirees (75%) have experienced cannonball events, major challenges that can derail a plan, or curveballs, relatively minor occurrences that cause setbacks. According to the research, the most common cannonballs and curveballs include having a family member or close friend pass away (42%), personal health issues (30%), coping with a spouse's or partner's health issues (21%) and significant financial setbacks (20%). The most impactful, however, are widowhood and divorce, which retirees say are profoundly disruptive to their lives. For some, retirement itself can be a cannonball, as 3 in 10 retirees (29%) said they were forced to retire unexpectedly.

On the other hand, 80% of retirees have experienced at least one windfall event, a positive gain often described as "good fortune" or a "blessing." The most fulfilling windfalls for retirees include becoming a grandparent, taking a dream vacation and discovering a new or renewed purpose in life. One of the biggest surprises was that aging and retirement itself appear to provide a kind of windfall to many. The study revealed that feelings of freedom, happiness and resilience all peak in retirement, while anxiety hits its lifetime low.

"Today's pre- and current retirees know they will face challenges but are willing to make adjustments, trade-offs and course corrections to improve their quality of life and sense of well-being as retirement continues to last longer than ever," said Lena Haas, Head of Wealth Management Advice and Solutions at Edward Jones. "We are encouraged to see that Americans understand they need to have a flexible plan and feel confident in their ability to handle the unexpected, particularly if they can learn from the experiences of others."

Course Corrections Across the Four Pillars

The study defined course corrections as the positive actions that pre-retirees and retirees are already taking or considering to improve their retirement journeys. Course corrections are motivated, and often necessitated, by life events that change the circumstances and goals of one's life plan. To understand the opportunities and impact of various course corrections, Edward Jones and Age Wave measured how frequently retirees take each action and how much each action improves their lives in retirement, which can be found in the full report.

Sample course corrections in each of the four pillars include:

• Health: Habits including healthy diet, regular exercise and mental stimulation can dramatically improve healthspan, lifespan and well-being in retirement
• Family: Spending more quality time with family (and less time with toxic people) can be very fulfilling, but setting emotional and financial boundaries can be just as worthwhile
• Purpose: There are many personal paths to purpose, and people can explore familiar options — trying new things, expanding their social circles to enrich their lives and even reinventing themselves with new dreams
• Finances: Given the many tools beyond the basics of increasing savings and minimizing debt, it is wise to seek trusted, holistic guidance when considering options and weighing tradeoffs

"The study revealed that spending more time with family is one of the most impactful course corrections people can make in retirement. Of the 56% of retirees who have spent more time with loved ones, 59% agree it significantly improved their lives," said Ken Dychtwald, Ph.D., psychologist/gerontologist and founder and CEO of Age Wave. "Interestingly, 45% of retirees say they have spent less time with toxic family members or friends, and it is equally as impactful (59%). There is no question that quality friendships and deep personal relationships can be the elixir of both well-being and fortitude for most people as they grow older."

Retirees also shared that numerous finance-related course corrections significantly improved their ability to thrive in this new chapter in life, including reducing or eliminating mortgage, credit card or other debt (60%); saving as much income as possible during working years (50%); obtaining supplemental health insurance (42%); and developing and following a financial plan and budget (40%). In addition, with increased volatility and negative shifts in the economy, many retirees have adjusted by cutting their spending (76%).

Millennials Reveal Preferences for Parents' Retirement

The research also revealed that many retirees find it challenging to balance continued support of their adult children with maintaining their own lifelong financial security. Many pre-retirees and retirees would or have addressed this issue by limiting financial support to adult children or other family members (63% and 69%, respectively) and limiting bequests to heirs (55% and 63%).

Millennials in turn worry that their parents may not have enough money to live comfortably in retirement (68%) and their parents may become financially dependent on them (61%). These adult children have their parents' best interests in mind, with a majority of Millennials (83%) reporting their parents' financial security in retirement matters more to them than receiving an inheritance.

Despite the fact that 83% of retirees indicated they rarely or never ask their adult children for retirement-related advice, their children have strong opinions about how they want their parents to live in retirement. Many millennials want their parents to adopt a more frugal lifestyle (37%), regularly challenge themselves mentally (35%), become more physically active (35%), spend more quality time with family (32%) or work longer or go back to work (26%).

Current Retirees, Financial Advisors Offer Sage Advice to Thrive in Retirement

In addition to covering the wide range of available course corrections, the study investigated practical advice from retirees to their pre-retiree peers. They suggest that pre-retirees consider test driving important aspects of their future retirement, such as experimenting with meaningful ways to stay physically or mentally active (73%), finding ways to maintain a sense of purpose (45%), practicing living on their retirement budget (45%), and trying out new hobbies or creative activities (42%).

More than a quarter of retirees (27%) and pre-retirees (30%) currently work with financial advisors, and they are more likely to feel confident in their ability to handle unexpected financial changes in retirement than those who don't (94% versus 78%). And, retirees and pre-retirees alike understand the value of comprehensive financial planning and advice, as 63% of retirees and 70% of pre-retirees working with a financial advisor, or open to doing so, want financial advisors who provide holistic retirement strategies.

"Course corrections can make the difference between thriving and struggling in retirement," added Haas. "Working with a financial advisor who can help you prepare for and adapt to the cannonballs, curveballs and windfalls is crucial to success across health, family, purpose and finances. This research makes us optimistic that many of today's and tomorrow's retirees will make resilient choices to thrive in their retirement, setting themselves up for an active, engaged and purposeful life."

To access the full report, "Resilient Choices: Trade-Offs, Adjustments and Course Corrections to Thrive in Retirement" visit https://www.edwardjones.com/us-en/market-news-insights/retirement/new-retirement/resilient-choices.

Methodology

The study was conducted by Age Wave in partnership with Edward Jones. After a thorough review of secondary research, qualitative research with retirees and pre-retirees was conducted by The Harris Poll through online focus groups and bulletin boards. As a major part of the investigation, Age Wave and The Harris Poll then fielded nationally representative online surveys with a total of over 12,000 respondents. An in-depth survey of 7,034 retirees and pre-retirees was conducted between January 3 and 31, 2023, among U.S. (n=5,519) and Canadian adults 50+ (n=1,515). Two additional surveys were conducted among adults 18 and older: one from February 7–9, 2023, in the U.S. (n=2,000) and Canada (n=1,019), and a second from March 9–13, 2023, in the U.S. (n=2,084). Data in each survey were weighted where necessary to bring them into line with their actual proportions in the population.

Pre-retirees are defined as those ages 50 or older, planning to retire within the next 10 years.

About Edward Jones
Edward Jones is a leading financial services firm in the U.S. and through its affiliate in Canada. The firm's nearly 19,000 financial advisors serve more than 8 million clients with a total of $1.7 trillion in client assets under care at the end of March 2023. Edward Jones' purpose is to partner for positive impact to improve the lives of its clients and colleagues, and together, better our communities and society. Through the dedication of the firm's approximately 52,000 associates and our branch presence in 68% of U.S. counties, the firm is committed to helping more people achieve financially what is most important to them. The Edward Jones website is at www.edwardjones.com, and its recruiting website is www.careers.edwardjones.com. Member SIPC.

About Age Wave
Age Wave is the nation's foremost thought leader on population aging and its profound business, social, financial, healthcare, workforce, and cultural implications. Under the leadership of co-founders Ken Dychtwald, PhD, and Maddy Dychtwald, Age Wave has developed a unique understanding of new generations of maturing consumers and their expectations, attitudes, hopes, and fears regarding their longer lives. Since its inception in 1986, the firm has provided breakthrough research, compelling presentations, award-winning communications, education and training systems, and results-driven marketing and consulting initiatives to over half the Fortune 500. For more information, please visit www.agewave.com. (Age Wave is not affiliated with Edward Jones.)

About The Harris Poll
The Harris Poll is a global consulting and market research firm that strives to reveal the authentic values of modern society to inspire leaders to create a better tomorrow. It works with clients in three primary areas: building twenty-first-century corporate reputation, crafting brand strategy and performance tracking, and earning organic media through public relations research. One of the longest running surveys in the U.S., The Harris Poll has tracked public opinion, motivations, and social sentiment since 1963, and is now part of Stagwell, the challenger holding company built to transform marketing. (The Harris Poll is not affiliated with Edward Jones.)

¹ Resilient Choices: Trade-Offs, Adjustments and Course Corrections to Thrive in Retirement (U.S. Version); Age Wave and Edward Jones; 2023

SOURCE Edward Jones