While recent research from Edelman Financial Engines (EFE) has found that Americans imagine their retirements years to be more active and purpose-driven than ever before, their confidence in affording that retirement is lagging.
More than one-third (35%) of Americans say their ideal retirement lifestyle feels financially out of reach, and nearly two-thirds (65%) feel only somewhat confident they can afford the retirement they envision.
EFE, the Boston-based independent wealth planning and workplace investment advisory firm, polled more than 3,000 U.S. adults and found that retirement is no longer viewed simply as a time to slow down.
Instead, Americans are planning for reinvention, family time, travel, and exploration. Nearly 4 in 10 (39%) say they want an adventurous retirement; 42% say they want to stay active; and a growing number envision a minimalist (26%) or nomadic (24%) lifestyle that does not tie them down.
“People are no longer just saving for retirement—they’re planning for how they want to live in it, and many view this phase of life as more dynamic than ever before,” said Kurt Fauerbach, SVP, Head of Workplace at EFE. “But one significant challenge is establishing the right level of financial security to reach those dreams. Turning that vision into reality requires a plan for generating income that can weather economic uncertainty and support long-term goals.”
Among those without financial advisors, the top area where they want support is retirement income planning (38%, up from 24% in 2023)
EFE research
Retirement planning has grown increasingly complex, with longer life expectancies, market volatility, inflation, and concerns about Social Security adding new pressures in recent years. More than 8 in 10 (81%) Americans are worried about potential reductions in Social Security benefits, up from 73% in 2023.
Among those without financial advisors, the top area where they want support is retirement income planning (38%, up from 24% in 2023), followed by help creating a comprehensive financial plan (34%). Even for individuals who do work with an advisor, retirement income planning is still viewed as the top unmet need (26%, up from 16%).
Money vs. time: toughest tradeoff?
When asked to choose between adding $1 million to their retirement savings or adding five extra healthy years to their life, 51% chose the money. Only when the time horizon expanded to 10 extra healthy years did some respondents (19%) shift their preference toward more time, which reinforces how the financial and physical quality of one’s retirement lifestyle is an important factor.
Parents also appear to be rethinking their legacy goals. Those who plan to leave an inheritance want to pass on more than double what their heirs expect. While the median amount children anticipate is $85,000, parents report a target of $200,000, with 72% aiming to leave at least $100,000.
“Our goal at Edelman Financial Engines is to take the guesswork out of retirement planning, which is an integral part of a broader financial plan,” said Amin Dabit, SVP, Wealth Planning at Edelman Financial Engines. “Through a personalized, comprehensive approach, we help clients connect the dots between income sources, tax strategies, estate planning, and healthcare costs so they can plan for the retirement they want—and live it with confidence.”
EFE has 144+ offices across the country and manages more than $293 billion in assets for 1.3 million clients.
SEE ALSO:
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.