Boomers and Gen X Want to Retire Differently

After a life of hard work, America’s workers deserve to put their feet up and enjoy a long, easy retirement. But more and more are opting to phase into retirement instead of giving up work altogether like previous generations.

The WTW 2024 Global Benefits Attitudes Survey, which polled 10,000 U.S. employees from January to March of this year, has revealed that one in three workers aged 50 and older (34 percent)—encompassing Baby Boomers and Generation X—have either begun transitioning into retirement (15 percent) by reducing their work hours or responsibilities, or have expressed an interest in doing so (19 percent).

“In previous generations, retirement was often seen as a distinct, full-stop event—people worked until a specific age and then exited the workforce entirely,” Jim Davis, senior wealth manager at Texas-based Aspen Wealth Management, told Newsweek. “Today, however, more retirees are opting for a phased approach, where they gradually reduce their work hours rather than retiring outright.”

Among those already transitioning into post-work life, 61 percent said they have reduced their work hours, while 41 percent said they have opted for less job responsibilities, according to the poll. A smaller percentage of employees are looking to switch roles within their industry or adjust how they work, such as shifting to more or less remote work.

“Employees worked until age 65, the age at which the Social Security Administration defined ‘full retirement age,’ and then they completely stopped working,” Stacey Chin, private wealth adviser at California’s Treehouse Wealth Advisors, explained to Newsweek. Back then, leaving work one day and never returning was more “financially feasible” thanks to “defined benefit pensions, more robust social security,” and shorter life expectancies. But this isn’t the case anymore.

Why Are Retirement Trends Changing?

Various factors come into play, experts have told Newsweek. “This shift is largely driven by a combination of financial needs, increased life expectancy, and a desire to stay mentally and socially active for longer,” Davis said.

“Factors like the 2008 financial crisis, stagnant wages, and concerns over long-term financial security, has left many feeling unsure about fully retiring,” Cliff Ambrose, founder and wealth manager at Apex Wealth, told Newsweek. “That uncertainty is driving both Boomers and Gen X to transition more gradually, keeping some income flowing while they enjoy the freedom of semi-retirement.”

Survey respondents agreed. When asked about the factors influencing their retirement decisions, financial security was the top reason (76 percent), followed by health considerations (50 percent) and a desire for more time focused on family, traveling and leisure (45 percent).

While previous generations enjoyed a somewhat easier climate to retire in, the same can’t be said for those retiring over the past decade or so, who are transitioning into retirement out of “economic necessity,” Chin said. The survey also found that 9 percent of workers admitted they aren’t saving enough for retirement, and just over half—52 percent—believe they are financially on track for retirement.

The way Americans save for retirement has also vastly changed in recent decades. According to the Congressional Research Service, in 1975, there were 27.2 million participants in private-sector defined-benefit pension plans, which promise a specified monthly benefit at retirement. By 2020, that number had dropped by more than half to 12 million.

However, the number of defined-contribution pensions that are subject to a rise and fall in investment value, such as a 401k, has risen significantly, up from 1.2 million in 1975 to 85.5 million in 2019.

Longer life expectancies are also a key reason, meaning workers need to save more as they expect to live for longer after quitting the workforce. According to Statista, the average life expectancy in 2020 was 78.8 years of age. This is a marked improvement on previous decades: at the turn of the millennium, Americans were on average living 76.4 years. In 1980, life expectancy was 73.25, and in 1960 it was 69.9.

Phased Retirement Benefits

Adaptations made to retirement plans aren’t without benefits. While the need to delay or phase-in retirement is borne largely of economic necessity, it also signals an attitude change among older generations. No longer are Americans embracing the mantra of “living to work,” but are instead “working to live”—prioritizing “flexibility and balance”—Ambrose explained.

But it’s not only economic uncertainty that is leading to retiring slowly. Davis explained that for many of today’s partially retired workers, continuing part-time helps provide “a sense of purpose and fulfillment in addition to supplementing their retirement income.”

A historical focus on career-driven identities is being replaced with a “broader cultural shift toward valuing quality of life,” Chin explained. This has been helped along by the decline in physical labor jobs over recent decades, which are often not based around the regular working hours enjoyed by office workers. Manufacturing jobs dropped by more than one-third between 1979 and 2019, according to the U.S. Bureau of Labor Statistics (BLS).

Future Generations

Experts also agree that the trend toward phasing into retirement is likely to stay and even expand as generations move through life.

Ambrose said that younger generations are likely to “navigate similar financial pressures” as their elders, making it “likely we’ll see this phased retirement trend grow even further in the future.”

Chin agreed. “Rising life expectancies, concerns about the sustainability of pension systems, and shifts in the traditional work environment, such as the gig economy and remote work, may lead more people to choose phased retirements.”

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