Lack of financial, physical wellness, together with longevity, hampering retirement plans

Americans are living longer than ever before, shifting expectations of retirement, according to a new report from the Guardian Life Insurance Company of America.

American longevity is increasing continuously. In 1960, average life expectancy was 69.7 years, and by 2060, the average life span is expected to increase to 85.6 years, according to the report.

“With many individuals now living well into their 80s and beyond, new retirement considerations are emerging,” Guardian said.

Retirement savings aren’t necessarily keeping up with the reality of a long life, according to the report. Fewer Americans have pensions than in the past, down from 30 million people in 1980 to 12 million people in 2020.

“While pensions have largely become a thing of the past, there are also concerns around using Social Security as a main source of retirement income. The average annual Social Security payout for retirees is only about $24,000, and the trust funds for Social Security may run out of money in 2033,” according to the report.

Despite expecting to retire at age 65, many Americans are retiring sooner. The average age of retirement is 62, Guardian said. For some, early retirement was a choice based on financial readiness, according to the report, but for 70% of early retirees, the reason was something beyond their control, such as job loss or deteriorating health.

“To fund a longer retirement, however, 73% of people say they plan to continue working part-time in retirement,” according to the research.

Just 39% of current workers and 40% of retirees surveyed rated their health as very good or excellent. Almost half of (47%) of the retirees surveyed said they thought they would be in better health in retirement.

But longevity isn’t all it’s cracked up to be, as it affects mental and emotional wellness, according to the report. 

“Although 60% of retirees say they have good mental health, 34% said they didn’t expect to feel so bored or miss their careers. Additionally, 27% were surprised by how lonely they feel or by how little time they are spending with family in retirement,” the authors wrote.

Guardian reported that many retirees and workers are taking a close look at their planning strategies. Twenty percent of surveyed retirees said they have regrets about past planning, and workers increasingly are concerned about financial planning as they anticipate living longer, according to the firm.

“Today’s retirement is as unique as the people entering it,” said Erin Culek, head of financial protection and retirement solutions at Guardian. “No matter their plans for their next chapter, people should feel confident in their retirement savings.”

The report is based on Guardian’s 14th Annual Workplace Benefits Study, which was fielded in separate surveys in January, February and April. Employer results are based on a national online survey of 2,000 employee benefits decision-makers. Employee results are based on a survey conducted among 2,000 employees aged 22 or more years who work full time or part time for companies that have at least five employees each. Retiree results are based on a survey conducted among 1,189 people aged 65 or more years who are fully retired but working part-time or are retired but working as consultants/contractors.