4 Trends for the Coming Decade
Kiplinger's Personal Finance|December 2021
From how long you work to where you choose to live, retirement will change in ways you may not expect.
By Catherine Siskos

THE ERA OF TRADING A LONG CAREER FOR a pension and afternoons on the golf course ended long ago. In its place, today’s retirees face growing financial pressure from multiple directions, including the looming fiscal crises for Social Security and Medicare.

Retirement for the middle or working class is changing more than retirement for the wealthy. The imbalance starts with retirement savings. Although a robust stock market helped turn a record 334,000 people into 401(k) millionaires by the end of 2020, one in three Americans also report that the pandemic set their savings back a few years, according to a Fidelity Investments survey. Americans in their fifties had, on average, $203,600 stashed away in their 401(k)s as of the fourth quarter last year, with people in their sixties reporting savings of only $25,500 more, Fidelity says.

Although most Americans will need to work longer, you have a shot at striking a better work-life balance, allowing more time for other pursuits. That’s good, because the one thing the four following forces shaping retirement in the 2020s have in common is the need for a bigger nest egg.

Flexible work at a price. You can’t be a little pregnant, but in the 2020s you might be a little retired. “Retirement will be less of a binary state. People will find small ways to work and phase out of the labor force,” says Allison Schrager, senior fellow at the Manhattan Institute. The pandemic set up less traditional work and more remote work, she adds, and that’s good for seniors. Many may prefer to work part-time or switch to a less stressful full-time job. Members of Generation X, who start turning 60 in 2025 and are known for being entrepreneurial, may be especially well positioned to work as consultants and set their own hours.

“Older workers value flexibility,” says the Urban Institute’s director of retirement policy, Richard W. Johnson. “They don’t want a traditional 9-to-5 job or to deal with the hassle of commuting, and they are willing to give up some salary to achieve that.”

Although age discrimination still exists, older managers are typically more willing to hire older workers, says Alicia Munnell, director of the Center for Retirement Research at Boston College. But “this also highlights the inequality for people who can’t work longer because of health problems” or the type of jobs they’re in, Johnson says. “They will have much lower retirement income than healthier people or those who can work longer in sedentary jobs.”

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