It’s time to rewrite your retirement expectations


How confident are you that you're truly prepared for what retirement may throw your way?


A flood of baby boomers entering retirement is reshaping perspectives about life after work. Rather than considering retirement as the final chapter of their lives, baby boomers of today are finding an opportunity to plan for more of an extended “encore.”

“Traditional retirement as we know it, where individuals disengage and then kick back, does not seem as applicable today,” says Bill Ringham, director of private wealth strategies at RBC Wealth Management–U.S.

Part of this change is due in part to the fact that Americans are living longer. For an average 65-year-old couple, there’s close to a 50 percent chance at least one spouse will live to age 94 and a 25 percent chance of one living to at least 98. This could mean a retirement spanning decades.

Learning from experience

Given the changing nature of retirement, Americans are likely to encounter some surprises as they embark on the next stage of their life. However, the experiences of already-retired Americans can offer insight into how their expectations, concerns and goals prior to retirement changed once they retired.

“Baby boomers who are still working can benefit from the experiences of boomers who are enjoying retirement,” says Angie O’Leary, head of Wealth Planning at RBC Wealth Management–U.S.

An Ipsos survey, conducted on behalf of RBC Wealth Management–U.S., reveals how expectations differ for recent retirees and those heading into retirement.

Rewriting Retirement, a survey which captured responses from 1,400 Americans—half in pre-retirement and half already retired—found boomers yet to retire list travel as their top goal once they leave the workforce. In comparison, top goals for those already in retirement include spending time with family, maintaining an active lifestyle and volunteering.

Pre-retirees and retirees differ in their top concerns for retirement. Prior to retirement, financial issues such as the risk of outliving assets and funding health care later in life are top of mind, according to the survey. For those already retired, priorities change to more holistic matters—maintaining a quality of life, minimizing the risk of mental or physical decline and not wanting to become a burden to their families.

Your retirement in three acts

“Boomers increasingly perceive retirement as an opportunity to explore new things and find more meaning,” says O’Leary. And given the lengthy nature of typical retirements today, retirement should no longer be viewed as a single block of time in your lifespan.

“Be prepared for the reality that things will change in your life as you grow older,” O’Leary says. “A key is to retain a future-focused and flexible wealth plan that can be adapted to meet the challenges and opportunities that occur through a long period in retirement.”

Top retirement catalysts Anticipated Actual
Age 51% 34%
Changes at work 27% 36%
Financial milestone 15% 7%

O’Leary also suggests viewing retirement in stages, pointing out that baby boomers may find that retirement plays out in three acts:

Act one: Re-energizing

Leaving a life focused around a career represents a major transition. While taking a break from the workaday world may be a relief, you may find yourself wanting to continue an active lifestyle. “I’ve had people tell me they spent a lifetime setting goals for retirement,” Ringham says, “but now that they are retired, they want to find something more productive to do with their time.”

Along with travel and renewed interest in a hobby, more baby boomers realize the importance of being involved during retirement, which could mean continuing to work on a reduced scale, getting involved with charitable organizations or even taking on childcare duties with grandkids. “A social community and working in some way, shape or form is healthy for those who have left work in a more traditional sense,” says Ringham.

Act two: Downshifting

Heading into your 70s, your energy level may not be what it once was. “This is when most people find a need to settle down a bit more,” says O’Leary. Often, physical decline makes it more challenging to travel, maintain your home and stay active with your hobbies. Downsizing and simplifying your life may be top of mind. Maintaining family, social connections and physical activity remain important at this point in life. But it’s reasonable to expect the pace of life begins to slow down.

Act three: Reflecting

As you reach your 80s and 90s, another major shift in focus often occurs: spending less money on activities like travel and hobbies, and putting more emphasis on the essentials of life. According to the Rewriting Retirement survey, 53 percent of retirees consider spending time with family a top priority. Additionally, health care expenses often become a more significant concern as retirees grow older. Annual health care expenses, on average, are nearly triple for an 85-year-old couple compared to a 65-year-old couple.1

“Planning in advance for this stage of life is critical,” says Ringham. “An important conversation to have is who may care for you if there is a need for specialized, long-term care.” This could be a family member, though Ringham suggests all parties look at this issue carefully. “It is important to have realistic solutions for care that won’t place an undue burden on any family member,” he adds. For couples, having a survivor plan is important. Often the survivor will have greater care needs as they age without the support of the spouse.

Planning makes a difference

How confident are you that you’re truly prepared for what retirement may throw your way? The answer, based on the results of the Rewriting Retirement survey, may lie in having a comprehensive wealth plan in place. Eighty-four percent of respondents who have a plan are confident about retirement, while the same is true for only 45 percent of those without a plan.

“Those with a plan have fewer concerns and generally are less likely to be blindsided by a change in direction that can easily occur over the course of a long retirement,” O’Leary says.

A solid retirement plan can help you prepare for unexpected changes in your life and give you the freedom to identify solutions to suit your lifestyle as your circumstances change in retirement.

Download the report

Read our full report about exploring the shifting mindset of a new generation of retirees.

RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.

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