The Great Retirement Divide: Jaw-Dropping Differences Between Your Future and Your Ancestors

Throughout your career, factors like technology and globalization have brought about numerous changes in the work environment. These societal changes have also had an impact on your personal life. Unsurprisingly, these same factors have significantly transformed the retirement landscape. Some changes are positive, some unwelcome, and others simply different. However, when viewed as a whole, your retirement will be distinctly different from that of your parents and grandparents.

Here are six trends that are currently reshaping retirement:

1. Greater diversity:

Over the past quarter century, one of the most notable trends in corporate America has been workforce diversification. This is largely driven by increased immigration, particularly from India, China, Mexico, and the Middle East. As these diverse workers age and enter retirement, there will be a shift in demand for senior accommodations and services, ranging from active adult communities to skilled care. Similarly, the empowerment and visibility of the LGBT community will drive changes in accommodations and services.

The senior service industry has been slow to respond to these needs, with active adult communities remaining predominantly white and politically conservative. LGBT individuals have experienced mistreatment in nursing homes, causing apprehension about available options as they approach older age. To effectively serve their changing clientele, the senior services industry will need to follow suit with diversity awareness, training, and policy changes.

2. Technology and connectedness:

The retiring Baby Boomers are the first group of people who are well-versed in using technology in their everyday activities. Having integrated technology into both personal and work spheres, they are unlikely to abandon their computing devices upon retirement. The internet’s ease of shopping, communication, information research, and entertainment consumption will make retirees’ lives easier, particularly for those with limited mobility or dispersed families. The computer skills acquired throughout their careers will enable retirees to engage in entrepreneurial pursuits and creative endeavors and remain mentally stimulated.

However, excessive computer use may lead to a sedentary lifestyle and reduced real-life human contact, which can negatively impact retirement.

3. Exploding healthcare costs:

The rapidly rising costs of health insurance premiums and prescription drugs pose significant concerns for retirees before age 65 when Medicare eligibility begins. For individuals who leave the workforce involuntarily and retire sooner than expected, these costs can have a catastrophic impact on their retirement savings and available funds. Many retirees are compelled to reenter the workforce solely to access health benefits through their employer or to earn the necessary funds to cover healthcare expenses.

4. More retirees working or engaged in entrepreneurial pursuits:

Retirement no longer means bidding farewell to work forever for many individuals. Some retirees continue working for various reasons. Financial necessity, a desire for routine, interaction with others, the challenge of work, the satisfaction of launching a business or pursuing a passion, and a lack of alternative ways to spend time are among the factors driving retirees to remain in the workforce. Work or entrepreneurial endeavors will likely be a part of their retirement lifestyle for years to come.

6. Changing recreational preferences:

As the Baby Boomers start retiring, they are changing their preferences for leisure activities. A 2016 study by the Physical Activity Council revealed interesting findings. Outdoor activities like camping, bicycling, hiking, and canoeing are becoming more popular, while golf, swimming for fitness, and using machines or weights for working out are losing popularity. Some of these shifts may be attributed to the level of activity’s intensity, while others relate to the cost of participation. These shifts affect active adult communities and the amenities they traditionally provide. Moreover, physical activity tends to increase based on income levels, as many sports and recreational activities require financial resources.

7. Increased focus on creativity and pursuit of passions:

There are distinct differences between retired individuals from older generations and Baby Boomers, who are currently in their 50s and 60s. Older retirees often worked for a single company, saved diligently, and planned for a traditional retirement focused on leisure activities like golf and card games.

Their retirement vision often included moving to retirement villages in warmer climates or becoming snowbirds. In contrast, the Baby Boomer generation is characterized by independence, education, and a free-thinking mindset. They sought personal growth, affluence, and purpose, often changing employers or careers multiple times. In retirement, they are less likely to slow down and engage in leisure pursuits; instead, they are inclined to pursue creative endeavors that bring meaning and satisfaction to their lives, such as writing, music, or art.

With the freedom from relying on these passions for income, they prefer to stay connected to society and live closer to urban centers rather than retreat to retirement villages.

Observing these factors can help individuals approaching retirement envision how their retirement lifestyle might take shape. These changing trends are also crucial for businesses and institutions serving the retired population, as they need to adapt and meet the evolving needs of this new generation.