Retirement 2.0

The latest trend in retirement is, well, not retiring at all. Retirement itself is no longer the goal. The goal seems to be adapting to a lower key phase of life and making sure each individual or family is prepared to deal with the personal and financial issues which apply to them. Despite the dozens of articles I’ve read which aim to teach advisors about what the ‘new retirement’ looks like, the more telling sign for me is listening to what my clients are saying. Frankly, they don’t even like saying the word retirement because it makes them feel old, unable, disconnected, etc.


Part of the shift in thinking, which has really been ongoing for the past two decades, is the recession. Both portfolio returns and the predictability of portfolio returns have seemingly disappeared. That fact alone has caused people to feel that their funds are continuously at risk. If they choose to pull their money out of stocks and bonds and put it into the seemingly safer fixed and insured instruments offered by banks, they will get a whopping return of around 1% per year or perhaps less.

The other part of the shift in thinking is that corporations and government to some extent no longer offer loaded retirement packages which include hundreds of thousands if not millions of dollars in payouts to those who dedicate 20-30 years of time to the same organization. Frankly, I’m glad this realization has finally set in. Corporations and governments simply cannot afford the promises of yesteryear and continuing to pay them out will cause more good firms to go under and/or need bailouts. The country needs a reality check and defined-benefit pensions, especially in the corporate sector, will likely continue to disappear.

So what is the new reality? Well, during primary working years it means two-income households, 30-40 year careers instead of 20-30, and greater levels of saving and investment throughout. The great ‘retirement shift’ doesn’t happen at a specific age, rather, once the individual or family has attained enough savings that, combined with social security and Medicare, they can afford to live a lower-key, less stressful lifestyle. In many cases this still means holding down a job, but maybe not as many hours or not as high-paying a position as was previously needed.

There are many products and strategies out there designed to deal with this massive planning need. Financial planning software can help provide a comprehensive view of one’s financial life and better identify vulnerabilities. Insurance companies have rolled out many products which can help mitigate longevity risks and offer guarantees in places where people need them.

The financial advisor’s role in Retirement 2.0 isn’t so much helping the client to gather and then distribute a precise dollar amount, but helping them feel comfortable with all the what-ifs that are to come. Those include an inability to work, a potential need to help aging parents, rising healthcare costs, increasing life expectancy, high inflation, etc. Each person has an individualized list of things that keep him or her up at night and that is what the advisor needs to understand. So maybe we can explain Retirement 2.0 as a shift away from the generic and towards highly individualized advice, something skilled financial advisors should already be used to.

As always, feel free to reach me with any questions or comments.

Russell Bailyn

Wealth Manager
Premier Financial Advisors, Inc
14 E 60th Street, #402
New York, NY 10022
P: 212-752-4343 *31
F: 212-752-7673
rbailyn@premieradvisors.net

Securities and certain investment advisory services offered through: First Allied Securities, Inc., a registered Broker/Dealer. Member: FINRA/SIPC. Premier Financial Advisors, Inc. is a Registered Investment Advisor. First Allied Securities & Premier Financial Advisors are not affiliated entities.

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