MORE AMERICANS PLAN TO SKIP TRADITIONAL RETIREMENT AND LOOK FORWARD TO ‘WORKING FOR PLEASURE’

The approach to retirement has dramatically changed in the past few years, with many Americans viewing this new phase of their life in very different — and sometimes non-traditional — ways. Many seniors either work longer, or decide to re-enter the workforce and “un-retire,” for instance.

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And now, the new Fidelity Investments State of Retirement Planning study, released March 12, found that a whopping 66% of Americans say the pandemic made them more intentional about focusing on their personal passions and dreams in retirement. Millennials lead the charge, with 73% of respondents belonging to that demographic indicating as much.

“The traditional retirement no longer holds much appeal for more than half of Gen Z — 60% — and millennials — 58% — who are encouraged by the rise of remote work and are more likely than their older counterparts to travel, relocate to somewhere scenic or abroad, or take a chance on starting their own business in retirement,” said Rita Assaf, vice president of retirement products for Fidelity Investments.

What’s more, across generations, two-thirds of respondents look forward to pursuing work for pleasure while in retirement and hope for a phased retirement — working full-time at first, then part-time, before stopping altogether, she added.

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What Does This Mean?

This redefinition of retirement translates into many different goals, including traveling, relocation or taking passion projects, according to the study. For instance, 33% of millennials and 32% of Gen Zers said that they are thinking more about traveling in retirement. Meanwhile, 24% of Gen Z Americans and 20% of millennials said they are encouraged to retire sooner as they know they will have job options later if they decide to un-retire.

“The beauty of working for pleasure and also a phased retirement is that it can be unique to each individual,” said Assaf. “People now have more opportunities than ever to change their lifestyle and still earn an income. Some people are even un-retiring and pursuing their dream job instead.”

What Are the Drivers of This Change, Given the Current Economic Landscape?

As Assaf explained, over the last several years, Americans witnessed a global pandemic and record high inflation, forcing them to re-evaluate everything from what’s most important to where to live and work to how to allocate budgets.

“Through these hardships, people are now optimistically approaching their ‘golden years’ with more intention and opportunity than ever before,” she said.

In addition, now that people know they can work from anywhere, Americans are re-imagining what it means to retire.

“Retirement no longer has to mean the end of one’s working life, there is opportunity for a second act,” she added.

Despite Challenges, Americans Remain Optimistic About Retirement

Assaf also underscored that during times of uncertainty and market volatility, it’s only natural for people to doubt whether they can reach their retirement planning goals. Yet, the study found that three-in-four Americans feel confident about retiring when, and how, they want.

“However, we’re encouraged by the strong confidence levels our study shows,” she said. “We know having a retirement plan helps consumers feel better prepared and more confident to weather any storm.”

She advised that when it comes to long-term investing, staying focused on the big picture is critical. For instance, Fidelity’s findings also showed that each generation has started to plan for retirement seven to eight years earlier than the last. This may be contributing to the higher retirement confidence levels seen today.

“We know some of these guidelines can be difficult, this is where it is important to make progress where you can,” she added.

“Many women and older generations were less confident than their male and younger counterparts.”

Generational and Gender Differences

The Fidelity study also found that while most people feel confident about their retirement prospects, women are less confident (68%) compared to men (80%).

In addition, almost one-third of women are also unsure of when they want to retire versus just 18% of men. When it comes to reaching retirement goals, women — more frequently than men — indicate debt and childcare payments as barriers, said Assaf.

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This article originally appeared on GOBankingRates.com: More Americans Plan To Skip Traditional Retirement and Look Forward To ‘Working for Pleasure’

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