The media has reported for years on the retirement crisis. Even before the pandemic, a majority of Americans faced a major shortfall in retirement savings. However, falling stock markets have erased more than $3 trillion from 401ks and IRAs according to Boston College’s Center for Retirement Research (CRR) and rising inflation is only increasing the number of Americans who are unprepared for a secure future.

But, that is actually the good news. You are ahead of the game if you have retirement savings at all. Only half of private-sector workers have an employer-sponsored retirement plan, and many of those who do end up saving very little.

And, the news is particularly bad for younger Americans who find themselves priced out of the housing market and are struggling to save, especially with their loads of student-loan debt.

What Does a Retirement Crisis Mean?

When people talk about the retirement crisis, they are referring to the fact that around 50% of Americans do not have enough savings to retire and maintain the lifestyle they enjoy while working.

People will still retire, but will have to live on less than they did while working.

It used to be that people worked up until nearly the end of their lives. However, longer life expectancies and earlier retirement dates have created an ever expanding period of time where people focus on leisure for 15-40 years at the end of their lives.

Social Security was only ever meant to cover part of your retirement expenses and pensions have largely disappeared. People were supposed to save into 401ks and IRAs to cover their retirement expenses.

And, retirement savings vehicles have worked well for wealthier workers. According to Alicia Munnell, Director at CRR, “The plans [401ks and IRAs] work quite well for the top third of workers, not so much for the middle third and not at all for the lower third. The top third always work for companies with 401(k) plans, the middle third go in and out of employment with coverage and end up with much smaller balances, and the bottom third are generally not covered by any plan and are entirely dependent on Social Security.”

Despite a retirement crisis involving savings shortfalls, is it time to follow the Queen of England’s advice: Keep Calm…. and Retire On? Well, considering that the Queen is 96 years old and still working, it is probably not her motto.  But, maybe it should be yours.

Sometimes the best way to solve a problem is to find a solution. Other times, you are better off reframing the problem. That is what many happy retirees are doing.

Here are 6 ideas for rethinking retirement whether you are a victim of the retirement crisis or not.

There may be a retirement crisis, but it is not necessarily negatively impacting people who take the plunge and retire. According to a Merrill Lynch Study, Beyond the Bucket List, of all times in our life, we are happiest and most content between the ages of 65 and 74. (Read more about the ages when happiness peaks.)

With all of our financial woes, how can this be?

Researchers suggest that while we may not have the right monetary assets, retirement gives us an abundance of time and it is this sense of freedom and possibility that gives us true happiness. Maybe the problem is not that we have too little money in our lives. Maybe the real problem is that we don’t have enough leisure time.

The study’s authors write:

As retirees move from work into retirement, nine out of ten (92%) say retirement gives them greater freedom and flexibility to do whatever they want—and on their own terms. Leaving full-time work behind, retirees say they are able to create their own schedules, open a business, sleep in, exercise more, get to know their grandchildren better, fall in love again, travel, read more, unplug, volunteer, learn a new skill, and try lots of things that they could previously only dream about.

And, nearly all retirees tell us that freedom and flexibility increase, regardless of how much money they have.

Retirement does not have to mean giving up work entirely.

More and more of today’s successful retirees are leaving inflexible jobs that they don’t really enjoy in pursuit of full or even part time work doing something they really love doing.

Work does not have to mean nose to the grindstone forever.

Use the NewRetirement Planner and see what happens to your retirement plan if you phase out of work or work part time or seasonally for 5-10 years.

We are living much longer and much healthier lives. There is no reason to think that it is time to wind down when you turn 65.

You have probably envisioned retiring at around 65 for most of your life, but times have changed. Odds are that you are healthier than your parents were at this age. The data also suggests that you will live longer than them.

You should not retire at 65 simply because you reach that milestone. You should retire when you are ready and prepared for the next chapter of your life. Retire because you have something you want to do — not just because you want to stop working.

Figuring out how much money you need for a secure retirement is a top priority if you are considering retirement. However, it is important to remember that this number does not need to be dependent on what you have been spending over the last 10 or 20 years of your life.

Retirement is a whole new chapter of your life. You can rethink where you live and what you spend money on. And, you can plan for different phases of retirement — with different spending levels for each phase.

The NewRetirement Planner enables you to set different spending levels for any time period you can imagine.

Rethinking your retirement budget can dramatically lower how much you need overall and make you feel better about your prospects in the midst of a retirement crisis.

When people talk about how much you need for retirement, they are usually talking about how much you should have saved and how that money is invested.

However, the greatest source of wealth for most retirees is in your home. Your home is likely worth more than all of your savings combined.

So, what if you downsize or get a reverse mortgage and use some of your home equity to help fund retirement?

The NewRetirement Planner lets you model these scenarios. After setting up your plan, you can see where you stand and try out different ideas for improving your retirement finances. See how all aspects of your plan are impacted if you decide to — for example — downsize and can release $100,000 in equity.

No matter who you are, however old, or how much you have saved, it is worthwhile to document a detailed financial plan. While most people hear retirement plan and think 401ks and IRAs, retirement planning means a lot more than just having a savings account.

Retirement planning includes thinking about your cash flow, insurance, taxes, when you will start Social Security, where you will live, whether or not you’ll use home equity, if you will work during retirement, potential inflation rates, investment returns and much more.

Planning does not need to be scary or complicated. The NewRetirement Planner makes it easy. Take two minutes to enter some initial information, then see where you stand today. Next, start adding more details and changing some of your information. Discover meaningful ways you can improve your retirement finances.



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