Recent years have shown us how critical it is to prepare for economic uncertainties and secure financial safety. Economic uncertainties caused by global events like the pandemic shattered the retirement plans of millions of people. It showed us why we must anticipate retirement trends well ahead to avoid our retirement plans going to shambles.
Anticipating retirement trends for the next decade can give you the edge to overcome challenges, including global crises. But is it possible for us to predict retirement trends a decade away? Well, yes and no. While there is no guarantee of how the retirement landscape will look ten years later, we can still understand critical factors influencing retirement trends.
This article will help you discover critical elements influencing retirement trends in the next decade. More importantly, we discuss how stakeholders can prepare for a better future and effective ways you can accomplish it.
Utilize Self-directed IRA Investments
Choosing self-directed IRA services can help you prepare for the next decade and fortify your retirement plans. You can use the various SDIRA investment options like real estate, precious metals, and more to diversify your retirement portfolio and generate wealth.
The best part is that you can consolidate all your SDIRA investments into a single account while accessing the numerous tax benefits of your retirement account. Moreover, IRAs are safer, and you can be sure your retirement funds will remain intact even if you have to deal with another global crisis.
Global Trend of Increasing Retirement Age
Looking at the retirement age globally for the last few decades, you will notice a rising inclination for people to retire late. As life expectancy continues to grow globally and people embrace healthier lifestyles, government and private organizations are reevaluating the retirement age.
In the coming decade, you can expect this trend to continue and witness more increase in the global retirement age. Another key factor driving this rise in retirement age is the need to sustain social security systems and maintain a skilled workforce.
Increased Phased Retirement
Phased retirement involves individuals minimizing their work hours or transitioning to other (often part-time) roles before retiring. More and more people are now opting for phased retirement as it offers several benefits to them. A phased retirement allows individuals a smoother transition to their retired life.
The most significant benefit of phased retirement is that it lets you keep a sense of purpose after nearing retirement age while providing them with financial stability. Moreover, employers also benefit from this trend as they retain talent longer.
Growing Financial Literacy
The growing public financial literacy is another factor you must consider when anticipating retirement trends for the next decade. You are more likely to see a heightened emphasis on financial education among individuals in the next decade, meaning they are ready to make informed decisions.
What does this mean? It means individuals will start making better retirement savings, investments, and budgeting decisions. You can also expect governments, employers, and financial institutions to play a critical role in boosting financial literacy.
Emerging Technologies in Retirement Planning
Technology is reshaping our society in every aspect, and retirement is no exception. In the next decade, you can expect a significant increase in the use of online or digital tools in retirement planning. Furthermore, these tools and tech will also revolutionize how individuals monitor their finances and investments.
It is also worth noting that Artificial Intelligence (AI) and machine learning are progressing at an unbelievable pace. You can fully expect to see AI-based tools to evaluate your personalized retirement plan and make necessary tweaks to meet your financial goals.
Growing Role of Employer-sponsored Retirement Plans
Another notable aspect of future retirement trends, especially for the next decade, is the expanding role of employer-sponsored retirement plans. Your standard 401(k)s and pension programs are all part of the employer-sponsored retirement programs.
Such programs will continue to evolve in the next decade, mainly due to the changing workforce dynamics. Employers are likely to find more innovative retirement packages and flexible savings options with personalization options.
Changing Social Security Systems
Like most countries, the US needs help to ensure sustainable social security systems. However, in the next decade, you will likely witness revolutionary reforms and changes to the social security systems. These new changes will help build long-term viability for these systems.
Furthermore, governments worldwide are already exploring methods like contribution rate adjustment and higher retirement ages to combat the crumbling system. It is also worth considering the failure of the existing social security system and diversifying your retirement portfolio to prepare for any eventuality.
Impact of Global Events
With the world becoming much smaller than it was ten years ago, global events are becoming more and more rampant. While not all global events are necessarily bad for your retirement plan, preparing for the subsequent impact before it comes knocking on your doors again is safer.
The COVID-19 pandemic is the best example of a global event disrupting retirement planning. The only solution to such events is a robust and adaptable retirement strategy. Hence, you must focus on building a retirement strategy and personalize it to meet your unique financial goals.
Changing Housing Trends
Housing choices are another aspect that can significantly impact retirement planning. The next decade will likely see a significant shift in housing preferences among retirees. Why? Because the vision of retirement for individuals is changing. Future retirees are more specific about their future retirement lifestyle.
The housing choice for retirees can change from one person to another. While some may prefer downsizing to more modest homes, some may prefer going to a retirement community. Either way, the evolving retirement landscape will significantly impact the changing housing choices of retirees.
Growing Focus on Health and Wellness
Health and wellness is another frontier that will see significant changes in the coming decade. With more people embracing a healthier lifestyle, retirement communities already offer services like comprehensive wellness programs for individuals.
It is worth noting that integrating tech into healthcare will also play a critical part in changing retirement trends through wellness programs. Telemedicine and health monitoring devices will be crucial in enhancing the quality of life in retirement.