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How younger generations are rethinking the conventional retirement

Illustration of people sitting around a bonfire playing guitar and roasting marshmallows

After decades at the same company, you're given a gold watch, a retirement party and a hearty goodbye as you sail off to an endless sea of free time. Sound a bit cliché? This scene is more out of touch than ever before. In truth, plenty of people will work toward full retirement between ages 60 and 70, but many others are starting to see this as a less desirable option.

According to Thrivent’s Retirement Readiness Survey*, Americans are reinventing the way they think about retirement.

They’re dreaming of a different future and adopting new and creative ways to make those dreams a reality. And they’re making choices now that will allow them to take a different path in the future. Here are four ways pre-retirees are rethinking the conventional retirement.

Make it ASAP
The FIRE (Financial Independence, Retire Early) movement focuses on retiring as early as possible.
Do it gradually
Keep working but cut down to shorter days or fewer days per week.
Stage a second act
Take the lessons you've learned from your career and apply them to an entirely new profession.
Don't retire at all
Join entrepreneurs, creative professionals and others who never want or need to hit "stop" at all.

1. Retire early with FIRE

Retiring early sounds pretty good to many members of the younger generations. Our survey found that about one in three pre-retirees—those saving for or nearing retirement—really want to retire early, whether that means leaving work very early or just a few years ahead of the average retirement age. That can be possible, but it requires good preparation and a commitment to aggressive savings goals.

FIRE ("financially independent, retire early,") is a strategy that involves extreme savings and aggressive investing. The main idea behind FIRE is to maximize your income in the early years of your career while streamlining and reducing lifestyle inflation to grow your investible assets.

Of course, life experiences can cause these goals to retire early to change. The survey found that one in five younger savers are interested in retiring early, but only one in 10 older pre-retirees reported seeing it as a possibility due to their economic situation.

Retiring early might require changes to your savings strategy and involve tradeoffs. Our survey respondents unanimously agreed that lifestyle spending is the greatest barrier to saving more. Dining out and shopping less frequently were among their top choices for cutting expenses. At the same time, they saw increasing 401(k) contributions and investing more aggressively as key aspects of the FIRE approach.

2. Retire gradually

About 30% of survey respondents said they aim to have a gradual retirement. Rather than choosing a single date to stop full-time work, they see an opportunity to gradually work fewer hours per day or fewer days per week.

Retiring gradually offers the chance to have more free time for family, hobbies, volunteering or other pursuits while you're still working. It may appeal to you if you feel like you’ve reached your financial goals but want to keep working, just because you enjoy it. You might also want to sustain your income to do good in your community or provide additional financial support for your loved ones.

3. Start a new career

Whether you call a new career your "second act" or a "new chapter," changing jobs is possible no matter your age. Our survey noted an uptick in younger generations expecting to try out a different career before they fully retire. 8% of those surveyed said that the idea of reinventing themselves later in life sounded interesting and that they believed they could bring the lessons they'd learned from a previous career to something new.

There’s a wealth of possibilities for a second act: Train for the job that appealed to you in your early years but maybe wasn't the right fit; explore a dream that interested you when you were younger; try your hand at something creative or fun. If you find fulfillment in helping others, you could use your skills and wisdom to benefit your community in some way. Or maybe you want to launch a side business or become a rental property owner.

Whatever you choose, it's important to consider how pursuing your passions will intersect with your personal financial situation. You may need to adjust your financial strategy.

4. Never retire

About 5% of those surveyed reported that they don't see retirement in their future at all, due to personal preference or financial reasons.

Some people might not think retirement is financially possible, and that’s a reality for many. Not everyone can make the numbers work to leave the workforce entirely.

Others choose to keep working because they love their jobs. If you see your profession as a personal calling, value the meaningful relationships you have with clients and colleagues, or simply enjoy your daily routine, you may prefer to keep working well past your 60s.

If a lifelong career appeals to you, it could impact how much you need to save for retirement. Setting aside extra money can help with health care or other unexpected expenses, and it can allow you to be more generous later in life. When you're able to use money as a tool, you can create new opportunities you might not have thought previously existed.

66% of people surveyed expect to be impacted by inflation upon reaching retirement.
2022 Thrivent Retirement Readiness Survey

Develop a retirement plan as unique as your dreams

The right financial strategy can help you define whatever kind of retirement you’d like—even if the one you picture isn’t today’s norm.

Your retirement plan can and should dovetail with how your spouse or partner (if you have one) wants to retire as well as the needs of others who matter to you. Finding common ground on your individual goals may require some discussion, but the result is the chance to achieve goals together.

You don’t have to follow one static plan for your whole life. An adjustable plan of action can help you in several ways:

  • Sets and satisfies savings goals. A financial advisor can help you get clarity on the number needed for your dream retirement, even if it’s likely years away. They can help you balance your current needs with a set of savings goals for the future. They also can help you reset your goals if need be. Not sure if you’re on track? Check out these savings milestones by age.

  • Identifies retirement income preferences and opportunities. A critical part of planning for retirement is determining what income sources are right for you and where they’ll come from. You don’t have to stash all your savings into a single 401(k). A mix of investments, annuities, life insurance and Social Security can provide diversified sources of income throughout retirement. You can start thinking about how much income you’ll need with a retirement income planning calculator.

  • Accounts for potential risks. Inflation and taxes, among other things, can change your financial picture, so being prepared helps. In fact, 66% of those surveyed expect to be impacted by inflation upon reaching retirement. A financial advisor can help walk you through any risks to your retirement savings so you can try to anticipate and prepare for the unexpected.

  • Offers flexibility. Our survey showed that older adults are typically satisfied with their consistency in savings and their ability to be flexible when circumstances changed. The birth of a child or grandchild can change your whole world, and their presence in your life may change your financial goals. Remember that you don’t have to commit to one plan forever—a great plan grows and flows with the events in your life.

Financial advisors aren’t there to tell you the right or wrong way to retire, nor will they make decisions for you. They will show you all the ways to help achieve your unique retirement goals. Contact a local Thrivent financial advisor to get focus and clarity on your retirement goals and start building a flexible action plan to get you there.

*Methodology: This research was conducted in June 2022 among a national sample of 1,500 adults in order to measure their sentiments, financial planning, knowledge, and issues regarding retirement. The interviews were conducted online and the data was broken into three sample groups; Saving, Nearing, and Retired. Results from the full survey have a margin of error of plus or minus 3 percentage points.

Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.

Thrivent financial advisors and professionals have general knowledge of the Social Security tenets. For complete details on your situation, contact the Social Security Administration.