Perspectives : DC Retirement | November 08, 2023

Successfully, not stressfully: Living well in retirement

Read time: 7 minutes

Fifth in a series about financial wellness.
Would you be surprised to learn that the answer is 55? In a 2021 survey, 50.3% of U.S. workers 55 or older said that they were retired.1

The average retirement age in the U.S. is 62.2 At that age, women can expect to live nearly 23 more years, on average; men, about 20 more years.3 That means your retirement plan participants can typically expect to spend at least two decades in retirement—or more, if they retire before 62.

To make those years successful, rather than stressful, they should understand that retirement planning doesn’t end when they leave the workforce. As pre-retirees (those within five years of retirement) and retirees, your participants will need to make decisions about some complicated topics, like how and when to draw down from their retirement accounts, when to claim Social Security, and how to manage their Medicare options.

Adding retirement to our financial wellness hub

According to the U.S. Bureau of Labor Statistics, 43% of the workforce is nearing retirement (that is, age 45) or older.To support your pre-retiree and retiree participants, we’ve expanded the financial wellness hub within our Participant Experience with a new section, Live Well in Retirement.

Perhaps your pre-retiree participants are concerned that they haven’t saved enough for retirement. Seventy-two percent of pre-retirees worry that they’ll run out of money in retirement, and 64% worry about not being able to maintain their lifestyles.To address those concerns and others, Live Well in Retirement offers your participants education, guidance, and action plans to help them develop the right budget for their lifestyles.

Four retirement guides

Research shows that sufficient retirement accounts make up only part of the equation for a successful retirement. Some level of financial understanding is also necessary, and many pre-retirees lack confidence in their ability to make smart decisions about their finances. In a 2022 survey, when asked “How ready do you feel overall for retirement?”, only 13% of pre-retirees said that they have both enough assets and sufficient financial expertise to retire. 6

Live Well in Retirement contains four online guides that can help your participants make the most of their retirement accounts and bolster their confidence. The guides are designed to help your participants formulate their retirement goals, develop a spending strategy, and manage their health care costs, all while supporting their physical and mental health.

Guide           My road map to retirement   Make the most of my savings   The basics of health care planning Be healthy and happy in retirement      

Your participants will learn how to …

  • Plan for the long term.
  • Make the most of Social Security.
  • Understand annuities.
  • Make their savings last.
  • Invest wisely.
  • Develop tax strategies.
  • Estimate their health care costs in retirement.
  • Understand Medicare options.
  • Plan for long-term care.
  • Prepare for emotional challenges.
  • Stay active.
  • Live happily in retirement.
And will have access to tools that allow them to … Estimate their retirement expenses Estimate their retirement income Compare Medicare choices, premiums, and prescription drug coverage based on their zip codes  

How you can support your participants’ financial wellness

To supplement our suite of financial wellness tools, you, as a plan sponsor, can also make plan design changes that benefit your pre-retiree and retired participants.

Our analysis of retirement-age participants from 2011 through 2021 found that 70% of them took steps to preserve their retirement plan assets and that 90% of plan dollars were preserved for retirement.7 As more participants are remaining in their retirement plans, making retiree-friendly plan design changes such as these can help provide a more hospitable environment:

  • Enabling ad hoc distributions.
  • Adding installment services.
  • Eliminating age restrictions.
  • Allowing terminated participants to roll over assets into the plan.

When these types of features are paired with benefits such as cost-effective advice, institutional pricing, and ongoing fiduciary oversight, retirees may find even more reason to stay in the plan.

Additional financial wellness resources

Living well in retirement represents the last step in the path to financial wellness. Our financial wellness materials can help your participants in all stages of their careers.

The path to financial wellness starts here
Introducing the first three pillars of our financial wellness framework

Tools to help your participants shrink high-interest debt
Strategies for controlling spending and paying down debt.

Are your participants expecting the unexpected?
Withstanding spending and income shocks that can deplete savings.

Putting one foot in front of the other—Making progress
Keep pushing forward toward your long-term goals with these saving tips.

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Richard Fry. Amid the Pandemic, a Rising Share of Older U.S. Adults Are Now Retired. Pew Research Center. November 4, 2021.

2 Rachel Hartman and Emily Brandon. “What is the Average Retirement Age?” U.S. News and World Report, May 25, 2023.

3 Annuity Advantage. Life Expectancy Tables. Accessed November 2, 2023. 

4 U.S. Bureau of Labor Statistics. Civilian Labor Force By Age, Sex, Race, and Ethnicity. Accessed October 18, 2023. 

5 Charles Schwab Corporation. Schwab Survey Finds ‘High Anxiety’ Among Pre-Retirees. February 10, 2020.

6 McKinsey & Company. From Saving to Spending: A Second Front Emerges in the U.S. Retirement Challenge. July 29, 2002.

7 Jeffrey W. Clark and Joseph C. Walsh. Retirement Distribution Decisions Among DC Plan Participants. Vanguard. February 2023.