What Retirees Want

A Holistic View of Life's Third Age

Ken Dychtwald, Robert Morison

• Publisher: Wiley
• Year: 2020
• Print ISBN: 9781119648086
• eBook ISBN: 9781119651918
• Edition: 1
• Topic: Personal Development
• Subtopic: Personal Finance

"Dychtwald and Morison offer a brilliant and convincing perspective: an essential re-think of what 'aging' and 'retirement' mean today and an invitation to help mobilize the best in the tidal wave of Boomer Third Agers."
— Daniel Goleman, PhD, Author, Emotional Intelligence: Why It Can Matter More Than IQ

Throughout 99 percent of human history, life expectancy at birth was less than 18 years. Few people had a chance to age. Today, thanks to extraordinary medical, demographic, and economic shifts, most of us expect to live long lives. Consequently, the world is witnessing a powerful new version of retirement, driven by the power and needs of the Baby Boomer generation. Consumers over age 50 account for more than half of all spending and control more than 70% of our total net worth – yet are largely ignored by youth-focused marketers. How will work, family, and retirement be transformed to accommodate two billion people over the age of 60 worldwide? In the coming years, we'll see explosive business growth fueled by this unprecedented longevity revolution.

What Retirees Want presents the culmination of 30 years of research by world-famous "Age Wave" expert Ken Dychtwald, Ph.D., and author and consultant Robert Morison. It explains how the aging of the Baby Boomers will forever change our lives, businesses, government programs, and the consumer marketplace. This exciting new stage of life, the "Third Age, " poses daunting questions:

• What will "old" look like in the years ahead? With continued advances in longevity, all of the traditional life-stage markers and boundaries will need to be adjusted.
• What new products and services will boom as a result of this coming longevity revolution?
• What unconscious ageist marketing practices are hurting people – and business growth?
• Will the majority of elder boomers outlive their pensions and retirement savings and how can this financial disaster be prevented?
• What incredible new technologies of medicine, life extension, and human enhancement await us in the near future?
• What purposeful new roles can we create for elder boomers so that the aging nations of the Americas, Europe, and Asia capitalize on the upsides of aging?
• Which pioneering organizations and companies worldwide have created marketing strategies and programs that resonate with the quirky and demanding Boomer generation?

In this entertaining, thought-provoking, and wide-ranging book, Dychtwald and Morison explain how individuals, businesses, non-profits, and governments can best prepare for a new era – where the needs and demands of the "Third Age" will set the lifestyle, health, social, marketplace, and political priorities of generations to come.

1
The Age Wave Is Rising: How the Boomers Are Transforming Retirement

WHAT DOES “RETIREMENT” mean anymore? Literally, the word “retire” means to “leave” or “withdraw” or even “disappear.” In popular connotation, retirement has become the time to end your career, kick back, and relax in a life of leisure. Today, however, retirement is in the midst of an incredible transformation, and tomorrow's retirement will have a whole new timing, meaning, and purpose.

The new retirement is not a time of gradual decline, nor is it about growing old quietly. Our studies find that increasing numbers of older men and women are not interested in “acting their age” and retreating to the sidelines. They'd rather rebel against ageist stereotypes and be productive and involved – even late-blooming – in their maturity. They see retirement as an opportunity for new dreams, contributions, and personal reinventions with new interests, relationships, and ways of living. Passive leisure is being replaced by adventure travel, “edutainment,” and “voluntourism” as a vital, turned-on generation of retirees seeks new experiences and new ways to learn.

Richard Eisenberg, Managing Editor of Next Avenue, talks about those ambitions: “People have different dreams. For some it's about starting a business that they've thought about for years. For some it's about learning a new language, or taking up an instrument, or going back to a hobby they had when they were children, or having the time to spend with family or traveling, or volunteering.” Mary Furlong, EdD, author of Turning Silver into Gold: How to Profit in the New Boomer Marketplace and a leading pioneer on the longevity marketplace, points out how today's retirees are on the move: “They're traveling to visit their grandchildren or their parents or they're having an adventure for themselves. Between their volunteering, part-time work, enjoying their grandchildren and, yes, their doctor's appointments, they're very busy. They want to stay in the game, even as peak performers.” During the past decades, there has been a great deal of focus on helping people add years to their lives. Now, it seems, they want to also add life to those years.

A Brief History of Retirement

Up until the twentieth century, most people did not retire. The economy was largely agrarian and family-based, and all generations pitched in. You worked all your life and work served a variety of functions, as a livelihood, a way of feeling worthwhile, and a social activity, where you encountered people of all ages. If somebody was no longer able to perform a physically demanding job, responsibilities changed. Grandpa would stop plowing the fields and instead fix the fences – and pass on his knowledge of field plowing. People had no real concept or expectation of retiring. We call that the first age of retirement, and it had lasted for centuries.

By the early twentieth century, the industrial revolution had migrated much of the labor force from the family farm to the factory assembly lines, and the second era of retirement began. Older workers were let go when they weren't needed or could no longer perform at the pace or intensity of their younger counterparts. Then, in the midst of the Great Depression, Social Security was created, officially institutionalizing retirement for older workers. The program had two main purposes: first, to create a modest safety net for older adults in a period of economic uncertainty, and second, with unemployment levels skyrocketing to 25%, to provide a process whereby older people would leave the workforce to make room for the young. However, life expectancy in the 1930s was only 62, so most people didn't live long enough to retire. If they did retire, it was for an average of less than five years.¹ Early in the Social Security program, there were 40 workers supporting each retiree, and the average annual payout was $220, so it was not much of a strain on the economy.

Through subsequent decades, people began retiring earlier and earlier (Figure 1.1). Social Security benefits were increased 77% in 1950, and by the 1960s, company pensions covered half of all workers, up from virtually none in 1900.² The average age at which people retired plummeted from 70 in 1950 to 66 in 1960 to 63 in 1990. In this third era of retirement, people were living longer and, for increasing numbers, retirement was lasting for decades. Retirement communities and cruise lines began to promote retirement as the “golden years” of life. Many people came to think of a financially secure retirement as an entitlement, a reward for a life of hard work. But it also came to be viewed as a badge of success, and the younger you retired, the more successful you were perceived to be.

We are entering what we'll call the fourth era of retirement, driven both by rising longevity and by an unprecedented influx of Boomer retirees. With their numbers also comes unprecedented economic clout. But they have less financial security from pensions and thus more responsibility for funding their own retirements. As a result, more of them will need to – or wish to – work a bit longer before they retire, and the average retirement age is 65 and rising. They will also have more “time affluence” in retirement and more options on how to spend it. And to further complicate the picture, they are looking at retirement differently. They don't want to be called “seniors” and they don't want their parents’ retirement. They want a kind of “ageless aging” and their dream is to stay active, engaged, and purposeful. How this new, fourth era is playing out is the core story of this book.

Figure 1.1 U.S. Average Retirement Age 1900–2020

Source: Age Wave / Merrill Lynch, Work in Retirement: Myths and Motivations; Center for Retirement Research at Boston College, 2020

How Demographics Are Redefining Retirement

The longevity revolution is the most disruptive trend in human history. Humans have walked the earth for 100,000 years, but our life expectancy has vaulted only in the last 100. As a result, the pace and processes of aging are being entirely redefined. A century ago, life expectancy in the United States was about 55 (Figure 1.2). Today, it is 79, and that's only good for 33rd place globally, almost 6 years behind Japan (Figure 1.3). With the possibility, and some would say inevitability, of medical breakthroughs in the near future, life expectancy could make another leap. How many decades might retirement last then?

Increasing longevity, however, is just half the story. There was a record-breaking baby boom in many countries after World War II. In the United States, we had 76 million births between 1946 and 1964. That baby boom became a teenager boom in the ’60s and ’70s, then a labor force boom, and today a retirement boom. Every day, another 10,000 American Boomers retire. In China, 440 million people were born during the period. And while the average life expectancy in China was a mere 35 in 1950, it has vaulted to over 75 today (and rising). China's age wave may be its biggest social, medical, and economic challenge/opportunity in the years ahead.

Figure 1.2 U.S. Life Expectancy at Birth, 1900–2020

Source: Social Security Administration, 2020

Figure 1.3 Life Expectancy at Birth, Selected Countries

Source: United Nations, 2019 Revision of World Population Prospects

Longevity plus the aging of the Baby Boom generation drive the dramatic growth in the number of older men and women. There are now more than a billion people age 60+ in the world, and it's estimated that we will cross the 2 billion threshold in 2048. This growth is most dramatic among the older old. In 1900, there were only 122,000 people aged 85+ in the United States. As of 2020, there are nearly 6.7 million (more than the total American population in 1800), representing an increase of 5,500%. That number will more than double to 14.5 million by 2040.

Moreover, the rate of population aging, which varies dramatically across different countries, is accelerating. It took 115 years (from 1865 to 1980) for the age 65+ cohort in France to rise from 7% of the total population to 14% (Figure 1.4). It took 85 years in Sweden and 69 in the United States. But it took only 25 years in Japan and will take 23 in China and 21 in Brazil. The next proportional increase, from 14% to 21%, is happening much faster: 42 years in France, 40 in Sweden, 20 in the United States, 12 in Japan, 11 in China. Japan and Sweden are already over 21%, and South Korea is going from 7% all the way to 21% in only 27 years. This population acceleration has major countries and cities scrambling to adjust their facilities and services.

Figure 1.4 The Speed of Aging: Time for 65+ Population to Rise From 7% to 14%

Source: U.S. Census Bureau

There are already approximately 68 million retirees in the United States, or 21% of the population. The number of retirees is projected to grow to 82 million by 2040. We say “approximately” because the definition of “retiree” is blurry with so many r...

Table of contents

• Cover
• Table of Contents
• Introduction
• 1 The Age Wave Is Rising
• 2 Ageism Sucks
• 3 Reframing Aging
• 4 Putting Wisdom to Work
• 5 The Time Affluence Explosion
• 6 Searching for the Fountain of Health
• 7 Retirement Isn't a Solo Project
• 8 Home and Community
• 9 Funding Longevity
• 10 The Giving Revolution
• 11 Retiring Retirement
• Acknowledgments
• About the Authors
• Index
• End User License Agreement