Although the COVID-19 pandemic is proving most deadly for older Americans, they are coping better than younger generations with the challenge, both psychologically and financially.
According to the latest Age Wave Study, produced in partnership with Edward Jones and The Harris Poll, about to 90% of boomers (age 56-74) and the silent generation (age 75 and up) report doing very well or somewhat well dealing with the the pandemic, compared with 76% of millennials (24-39) and Gen Zers (18-23) and 85% of Gen Xers. Moreover, far fewer retirees report they're not coping well at all compared to younger generations: — 5%-12% vs. 15%-24%.
Even more dramatic were the differences in the pandemic's impact on personal financial security. Just 6% of those 75 and older and 16% of boomers reported that the pandemic negatively affected their financial security, compared to over 30% of Gen Zers and millennials and 24% of Gen Xers.
"Older people have been through more. They show more resilience and emotional intelligence and fortitude than any other generation." said Ken Dychtwald, the founder and CEO of Age Wave in a recent webinar about the latest study. The company focuses on multiple issues relating to an aging population, including health care, finances, workforce and culture.
"The pandemic has significantly reduced the financial security of a quarter of Americans, with the greatest impact on younger generations," according to the study, called The Four Pillars of the New Retirement.
The Four Pillars of the New Retirement study is based on a survey of 9,000 adults age 18 and older in the U.S. and Canada plus in-depth interviews with leading subject matter experts as well as online forums and focus groups and a review of more than 100 studies, articles and publications.
The Four Pillars
The four pillars are health, family, purpose and finances. Underpinning them all is the view that "retirement is no longer about the end of work," said Ken Cella, head of Edward Jones' Client Strategies Group, who joined Dychtwald in the webinar. "It's about a new beginning… Retirement is being redefined."
But it may be delayed because of the COVID-19 pandemic. The study found that 29% of adults who plan to retire will delay retirement because of the COVID-19 pandemic, retiring on average 3.3 years later. Ten percent plan to retire earlier.
Overall, 68 million individuals have altered retirement timing and 20 million have stopped making contributions to their retirement savings, according to the study.
The COVID-19 pandemic "has accelerated some key retirement retirement trends and cast each of the four pillars in a new light," according to the study's introduction, written by Dychtwald and Cella.
Here are some of the highlights from the study's four pillars that advisors may want to keep in mind when working with clients on their retirement plans and savings.
Health
Americans' health spans do not match their lifespans, leaving many older Americans living 10 years in poor health. Fewer boomers and the next generation, 75 and older, report very good to excellent physical health than younger generations, but more of them report very good to excellent mental health — over 60%, versus 50% or less for younger generations.
Alzheimer's and other forms of dementia are the health issues that retirees fear the most in their later lives. About 13.8 million older Americans are projected to suffer from Alzheimer's, according to the Alzheimer's Association.
