Follow-up to milestone study reveals heightened focus on meaning, empathy, and non-financial aspects of retirement
Just as high-net-worth investors are looking to be more purposeful with their capital allocations, retirees are also re-evaluating how they spend their sunset years.
That’s the key finding from new research released by Edward Jones in collaboration with the Age Wave Institute, which looks at how the impact of COVID has prompted more Americans in retirement to actively pursue meaning in their remaining years.
The research follows their landmark study conducted in 2020, which focused on four central pillars of retirement: health, family, purpose, and finances. For this wave of the study, over 2,000 adults were interviewed.
Among the retirees surveyed, 92% agreed that purpose is key to a successful retirement. Compared to younger participants, they were also more likely to say that having a sense of purpose in life is important to reach optimal wellbeing (69% of retirees, vs. 55% of all other respondents).
While Americans’ sense of purpose took a hit early in the pandemic, three fourths of the survey respondents (76%) said the pandemic helped them “refocus on what’s most important in life.” Nearly two thirds of all survey participants (63%) gave themselves an “A” or “B” on “spending their time in purposeful ways,” compared to just “55%” in May 2020.
"The past year disrupted life as we knew it, yet, today, we are encouraged to see that Americans across five generations are taking steps to reset, reprioritize and reconsider their purpose and their retirement plans," said Ken Cella, Edward Jones Client Services Group Principal.
While the virus may pose a greater risk to older people’s physical health, poll participants in retirement reported greater optimism than others. While 46% of respondents overall said the pandemic has given them "more appreciation for what makes life meaningful,” that number rose to 61% among retirees. More than half of retirees (53%) also said they’ve grown to have “greater empathy and compassion for people who are struggling in ways that they are not.”
Because they have greater freedom from responsibilities and stressors, as well as the freedom to chase after their own interests and purpose, retirees generally reported much higher levels of contentment and happiness than non-retirees. They also displayed the greatest levels of emotional resilience and least negative mental impacts, though they did cite Alzheimer’s as the most frightening health risk they faced amid the pandemic.
When asked where they find purpose, meaning, and fulfillment, 67% of retirees said it’s from spending time with loved ones. Nine-tenths (93%) said feeling useful is important in retirement, and 87% agreed that being useful “makes them feel youthful.”
The top three financial worries shared by retirees were healthcare and long-term care costs (58%), unexpected expenses (56%), and a severe economic downturn or recession (58%), the same as the concerns that emerged in the previous research. One in three respondents overall (32%) said they expect a delayed retirement because of the pandemic.
“Over the past year, through these studies, we've witnessed an increase in people's need and desire for help with retirement planning extending far beyond just finances," Cella added.
Among current retirees, more than half said they wished they had done more to plan for both the financial (61%) and non-financial (54%) aspects of retirement, underscoring the need for comprehensive guidance. Seventy per cent of all respondents said the pandemic was a “financial wake-up call” that made them more mindful of their long-term finances. Meanwhile, three quarters of those still in the workforce (77%) wished there were more resources available to help them build a retirement that goes beyond financial considerations.