I will be starting my first job next January, and have already had a few people talk to me about when I’m going to retire and how I’m going to save for that. In my current state of mind, retirement is so far down the list of things I’m thinking about, that it almost feels like putting away money now is a waste of time. In the world today, my thought process may be a bit closer to reality than it used to be. This isn’t because of some promise of universal basic income, but rather a question of whether or not retirement is really as necessary or even as desired as it once was. A survey done by Willis Towers Watson in 2016 asked 4,049 retirees what their biggest incentives to retire were. Sixty-four percent of responders ranked “Personal” reasons linked to lifestyle as a top reason to retire. Contrasting that, only twenty-four percent of responders ranked “Normative” reasons linked to social security benefits or government health insurance as a top choice. These seem like very different circumstances to make the same decision, and it appears that our society will need to address both.
In regard to the personal lifestyle that people seek in retirement, more companies appear to be helping employees achieve this during their work life with various accommodations designed to reduce stress. A study done by the Harvard Business Review showed that “Health care expenditures for employees with high levels of stress were 46 percent greater than at similar organizations without high levels of stress.” So while employers may market themselves as being an organization that looks out for the long-term happiness of their employees, they are also seeing the de-stressed environment positively affect their bottom line. If employees are therefore more fulfilled and less anxious about coming to work, perhaps the need for a more stress-free lifestyle in life won’t remain a top reason to retire. This also raises another common desire of retirees: to spend more time with their children and family. With more people in the younger generations expressing a desire to not have children, or have them much later, our desire to find more time for grandchildren when we’re older may lessen.
The second reason - eligibility for government benefits - may also soon become a moot point for budding retirees. As a general rule, we have an increasing number of people entering retirement age, with a decreasing or stagnant amount of people entering and sustaining the workforce. While the Social Security commissioner back in 2016 wrote “As a whole, Social Security is fully funded until 2034,” Carolyn Colvin went on to write “And after that it is about three-quarters financed.” This doesn’t mean we’re going to run out of money in the next year, or even the next twenty, but it does cause reason for concern when paired with the aging population phenomenon. If the normally enticing government benefits for retiring do dry up, one of the other top reasons for retiring may also soon be gone.
A lot can and will happen during my career, and much of it will be affected by the state of the economy and other macro factors. While some of these happenings can be predicted by past events or tell-tale signs, it appears that retirement is not one of them. As social customs, company cultures, and government programs change, evolve, and maybe even fade away, we may be left with a population that does not know retirement the way they once did.