Broker Check


Submitted by T. Rowe Price

All too often, retirement planning success is measured purely by financial metrics: savings amounts (15 percent per year), income replacement ratios (75 percent of preretirement income), or withdrawal strategies (4 percent per year). And the most critical part of planning for retirement is forgotten: the plan itself.

Put another way: How can an employee know how much money they’re going to need in retirement if they don’t know what they’re saving for?

Seventy-four percent of 50-59-year-olds have made a serious effort to plan for financial aspects of retirement.  Only 35 percent of 50-59-year-olds have made a serious effort to prepare for the emotional aspects of retirement.

Retirement plan advisors can help pre-retirees address the uncertainties of the future.  They can help provide financial and non-financial guidance.

Three key areas that studies actual retiree responses, indicate the following key drivers of happiness in retirement:


· Lifestyle: How participants will spend their time in retirement (family, leisure, travel,     work, etc.)

       ·         70% want to travel

       ·         57% want to spend time with family and friends

       ·         50% want to pursue hobbies

       ·         30% say they want to work


· Health Care: How participants want to give and receive needed care

          Concern About Personal Events:

          ·         High ongoing healthcare cost

          ·         12% Extremely concerned

          ·         13% Very concerned

          ·         35% Somewhat concerned


         Having a major illness or health event

         ·         11% Extremely concerned

         ·         20% Very concerned

         ·         37% Somewhat concerned


         The need for long-term care

         ·         11% Extremely concerned

         ·         25% Very concerned

         ·         43% Somewhat concerned


         Needing to care for your spouse/partner

         ·         15% Extremely concerned

         ·         26% Very concerned

         ·         40% Somewhat concerned


         The death of a spouse/partner

         ·         25% Extremely concerned

         ·         29% Very concerned

         ·         21% Somewhat concerned

 Meaning: How participants will create a sense of purpose and fulfillment

          Following almost 1,000 people, a study found that people with “high purpose”                 were:

         ·         2.4x less likely to be afflicted with Alzheimer’s

         ·         Less likely to develop mild cognitive impairment

         ·         Less likely to develop disabilities or die young


Benefits for Employers:  Workforce Management Flexibility:

·         Large amounts of time, money and resources go to offer and maintain benefits programs that help prepare employees for the next phase of their lives (retirement plans, company matching money, physical/financial wellness programs, healthy incentive programs).

·         What happens when the employee – due to a lack of emotional and psychological preparedness-doesn’t end up retiring?

·         That backlog can create recruitment and retention issues – as younger talent may seek opportunities elsewhere if A) there is no “foot in the door” position open, or B) they see minimal opportunities to advance internally.


Food for thought: Even if widespread workforce management issues are not prevalent, consider the type of employee that may have a difficult time moving on: the “career-minded executive” whose identity is wrapped up in their achievements and stature within the organization.

Long-term Cost Mitigation:

·         As a workforce’s age and tenure increase, so do the costs related to keeping that employee

·         An aging demographic – many of whom may not be emotionally prepared to retire – could impact organizational costs such as increased heath care, payroll, or worker’s compensation.


 Last reviewed 6/1/2022

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