Increased longevity, rising wealth and more complicated expectations are offering financial advisors a remarkable opportunity to help clients live up to a third of their lives in retirement, according to Maddy Dychtwald, co-founder of research firm Age Wave.

“We’re in the middle of a longevity revolution,” Dychtwald said in this morning’s keynote address at FA’s Invest in Women conference. “It’s great to help younger people, but older people really need your help—not just in preparing for retirement but in getting through retirement. The amount of time spent in retirement has tripled since 1935. The planning for that is a lot more complex than it used to be, and once you’re in retirement, you still have to plan.”

A recent study that Dychtwald was involved in, "The Four Pillars of the New Retirement: What a Difference a Year Makes," gives evidence of how retirement is changing, she said.

This latest report by Age Wave, the Harris Poll and Edward Jones follows up on a 2020 inaugural study that polled 9,000 participants across five generations on their retirement-related hopes, dreams and fears. Given that the Covid-19 pandemic touched everyone who participated in the first study, it should be no surprise that the findings for 2021 revealed that the idea of retirement has been reshaped, Dychtwald said.

“We did this smack in the middle of the Covid pandemic, and so we got to see what’s really in the hearts and minds of Americans,” she said. “The concept of retirement is transforming.”

Dychtwald pointed to several trends that are contributing to this change. First, the population of people close to or in retirement is massive. “Two-thirds of all people in the history of the world over 65 are alive right now,” she said. Second, she continued, “life expectancy has skyrocketed. On the first day of the 20th century, the average life expectancy was 47. On the last day, it was 78.”

And third, a shift in wealth to older citizens has enabled new ways of thinking, as more than 70% of the country’s total wealth is held by people 50 years old and older. “In general, they’re thinking about retirement as a whole new chapter in their lives,” she said. “Yes, 22% say rest and relaxation is what retirement is all about, but 55% want to discover new purposes, new passions and a new way of being in the world.”

Of the remainder, 15% think of retirement as a continuation of life before, and 8% perceive retirement to be “the beginning of the end,” according to the study. “That’s obviously a little sad,” Dychtwald said, “but for most people we hear a big word repeated over and over, and that word is freedom. More freedom from responsibilities and worries, and freedom to pursue your dreams and passions. For these people, retirement equals contentment.”

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