Retirement today feels “less cookie-cutter” than it used to be, according to a new Franklin Templeton survey.
Most respondents indicate that retirement now looks different for everyone (88%) and that there is no single path to retirement today (82%). A majority envision their financial future will be different from their grandparents (65%), parents (56%), and children (56%).
“We believe every U.S. worker and household has the right to experience financial wellbeing throughout each phase of life,” Yaqub Ahmed, Head of Retirement, Insurance & 529 – U.S. at Franklin Templeton, said in a statement. “New dynamics represent an opportunity for breakthrough innovation and require imagination, creativity, and collaboration to solve. Our mission with RII is to bring together industry experts to help improve the future of retirement in the United States and to guide Franklin Templeton’s retirement strategy and product efforts in the context of our shared vision of success.”
A more holistic view
The vast majority of survey respondents associate their current physical (74%), mental (70%), and financial (66%) health with wellbeing. More than half say their financial wellbeing isn’t primarily about money but includes their health and lifestyle (57%).
Interestingly, while workers today place nearly equal importance on mental (81%), physical (80%) and financial (76%) health, they feel least in control of their financial (55%) health as compared to physical (62%) and mental (58%) health.
Many respondents struggle to find a holistic view, with 61% indicating they need to consult many sources to get an overall picture of their finances, and 51% stating it is too complicated to integrate all of their financial info and goals into a single picture. Seventy percent would like a “Fitbit-like program for their finances” to easily track everything all in one place.
The future of benefits
Three out of four workers want their workplace to provide more resources to help them with their overall financial wellbeing (75%), believing their employer should provide incentives for good financial habits (79%) – as well as good health habits (78%). In fact, workers are more interested in long-term support, over today’s monetary gains, with most preferring a boosted 401(k) match to a raise.
Nine in 10 respondents are also looking for tools to visualize their future and optimize wellbeing, with top choices being planning tools and resources (89%). Tools designed to help achieve financial independence (35%) and visualize long- and short-term financial goals side by side (35%) top their wish list.
As financial futures become more fluid, personalization is non-negotiable. Nearly three quarters (73%) of workers expect their financial management apps and programs to use what they know about them to suggest the most appropriate resources, while 62% say, “unless I am getting personalized recommendations, I feel like financial education isn’t very helpful” (68% men vs. 54% women).
Americans are seeking a holistic and consolidated view of their finances to achieve overall financial health:
- 73 percent say they wish there was a resource that combined the financial view of their entire household.
- 73 percent say they wish there were more ways to get a view of their overall wellbeing.
- 62 percent say they wish they had a ‘wellbeing coach’ to help with all areas of wellness not just physical or financial.
Changing retirement landscape
Eighty percent of respondents agree that the traditional idea of retirement is no longer accurate for most people’s expectations or experiences, while at the same time, three quarters (75%) say that their future financial goals and plans look different today than they did five years ago.
Respondents also feel it is more important to achieve financial freedom than to retire but that financial freedom is not always as attainable. More specifically, 76% of respondents say there is appeal in achieving financial freedom, while only 56% think it is likely achievable. At the same time, 69% say there is appeal in retirement, while 61% say it is likely achievable – a notably smaller gap.
Workers identified their most important financial milestones today as financial freedom (76%) and financial independence (74%), also indicating that financial independence feels more empowering than retirement (81%). Women find financial independence particularly appealing (81 percent vs. 68 percent men).
“The American worker is looking to employers to upgrade their long-term financial health and optimize their overall wellbeing,” Ahmed added. “Technology will play an integral role for employers and employees to address these needs. New innovations will allow individuals to reap the rewards, and educate themselves, so they may achieve financial independence.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
