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How Retirement Plans are Changing

As we all know, people are living longer and longer. What most people probably don’t think about though is that we are in retirement for longer and longer as well and how that fact affects retirement plans. In the past, the age of retirement was nearly equal to life expectancies. The average retirement age in 1940, when people started receiving Social Security payments, was 65 and the average life expectancy was only 60! Many people, unfortunately, didn’t even make it to retirement and even fewer spent multiple years in retirement. This meant most people didn’t need huge nest eggs tucked away to enjoy a long and fruitful retirement – a company pension and social security were usually more than enough to get by.

Your grandparent's retirement plan simply won’t work for the modern retiree.

Modern retirees must try to overcome a multitude of challenges that previous generations weren’t even subjected to. The biggest concern facing most retirees today is the rising cost of health care, which is now outpacing other general prices and incomes. In fact, since 2007, the costs of healthcare have risen by over 21%!

Low Savings Rates

Another big issue is Americans’ ability to save. Salaries are not keeping up with the general cost of living and inflation takes a big bite each year out of people’s purchasing power. People are finding it harder and harder to stick to the 50/30/20 rule, which sees people using 50% of their income for necessities, 30% for discretionary spending, and 20% for savings. Modern retirement plans simply must account for these discrepancies.

The Sandwich Generation

Many middle-aged people don’t have the luxury of just looking after themselves, or even just their own children. They are referred to as the Sandwich Generation – that generation that takes care of both their parents and children financially, and possibly emotionally (or even physically). Many may even take on the responsibility of paying for their parents’ medical bills – not an easy feat in these times of sky-high prices. Now, imagine trying to retire while also taking care of elderly parents! Yet this is the reality many retirees face.


Previously, high and low inflation have existed in our nation’s history. But they didn’t affect retirees as much because, as mentioned earlier, retirees (on average) didn’t live long in retirement. Now, most people have 20 or 30-year-long retirements – in such scenarios, the cost of living can double in only twenty years if inflation is at a relatively low 3%, relegating retirees to an old-fashioned salary that can’t keep up with modern prices and demands. Today’s retirees need to ensure they have an income for life, a life that has no foreseeable end.

A New Lease on Life

Rather than looking at retirement as an age to finally rest and bask in their newfound freedom, many modern retirees see it as an opportunity to fulfill lifelong dreams now that they are free from the confines of their 9-5. Perhaps it’s starting a new business or traveling to faraway destinations – but whatever it is, it probably costs money! While it’s great that people are living longer and healthier, such retirements need careful planning and forethought.
That’s where we come in. At Walters Strategic Advisors, we can create a comprehensive retirement plan customized to your specific financial goals, one that will see you retiring financially fit and ready for a new, long life! Simply click the button below to schedule a meeting and take the first step toward a happy retirement.

About the Author

  • Douglas Walters

    Doug is the Managing Partner of Walters Strategic Partners, LLC, a licensed Registered Investment Advisory firm. Doug is a licensed Certified Public Accountant (CPA) in the state of Florida and holds a Series 65 Investment Advisor Representative securities license. He is also a member of the AICPA. With over 28 years of experience as a CPA, he believes investment decisions should be based on decades of peer-reviewed research rather than relying on the latest “hot tip” from media outlets. This empirical evidence puts the science of investing to work for his clients.

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