Engaging clients in conversations around what longevity may mean for them offers opportunities for deeper conversations around their well-being, their working lives, and their financial goals, according to new research from Transamerica and the Massachusetts Institute of Technology (MIT) AgeLab.
Indeed, longevity is enabling new approaches to the traditional three-part American journey of education, work and retirement, the researchers explain in “Longevity as Opportunity—New Conversations on Work, Finances, and Well-Being,” which analyzes feedback from a dozen focus groups and a national survey of 1,200 people.
“Employers and financial professionals who recognize this unique opportunity can empower their employees and clients to navigate a life course very different from what their parents and grandparents experienced,” the researchers emphasize.
The opportunity is particularly attractive for those engaging with America’s middle market, which the study notes is relatively underserved by the financial services industry, in need of tools and education to improve financial literacy, and at approximately 68 million households represents the largest segment of the population.
The challenge for many clients, however, is to find a balance between prioritizing the present and future and between many different roles and priorities. As people's lives and situations change within and across different life stages, so too may their objectives shift and evolve.
“What our data shows, and what we are seeing in the marketplace across generations, is that the way we approach our lives and the way we work is changing. People want flexibility and choice in all parts of their life, both at work and home,” observes Phil Eckman, President of Workplace Solutions at Transamerica. “And employers have a powerful opportunity in this new world of work to establish values that focus on the whole person and invest in solutions that support employees’ mental, physical, and financial health.”
As such, financial professionals can strengthen relationships with clients by helping them to anticipate how their life trajectories might be different from those of their parents and grandparents, and helping them to identify their shorter- and longer-term goals.
Longevity Views
Among other things, the findings reveal how navigating an increasingly complex world while planning for longevity presents considerable challenges and opportunities that change as people move through adulthood. The study analyzed three overarching themes—work, finances and well-being—according to young adults (ages 20 to 39), adults in midlife (40 to 59) and older adults (60 and up).
Not surprisingly, the research revealed that well-being and retirement continue to factor prominently in how people view longevity. Nearly all respondents (92%) said saving enough money to retire was “very or somewhat” important, and many acknowledged that their current lifestyle, including exercise and nutrition habits, would affect how long they lived. However, more than half of respondents (54%) agreed that they would need to change some of their habits to be healthier later in life.
Work Priorities
The research further demonstrated that people prioritize work for different reasons as they age, suggesting that employers who understand these motivations and embrace the needs of their employees at different life stages may be better able to recruit and retain top talent.
As one might expect, younger adults tend to focus more on establishing and advancing their careers, while prioritizing work that aligns with their beliefs and passions. In midlife, flexibility and pay became more important to individuals entering their peak earning years and facing expenses related to childcare and caregiving. To that end, nearly two-thirds of midlife adults (62%) said high salaries were top priorities.
Older adults, meanwhile, reported financial benefits such as pay, medical insurance, and employer retirement plans as top priorities. In this case, two-thirds of people still working in their 60s and 70s said retirement was “very or extremely” important, yet nearly 6 in 10 (58%) retirees in the same age group said they retired earlier than planned, suggesting that surprise health events or changes in the work environment can prompt older adults to leave the workforce.
Financial Priorities
Again, no surprise that people want to feel empowered and confident in making financial decisions at all stages of adulthood, yet their needs and interests change over time. For instance, the researchers note that, while younger adults tend to believe they are doing well financially, they also reported lower levels of financial confidence compared with other age groups and cited “saving more money” a top overall priority for the next 10 years of their lives.
Younger adults also most frequently said their top savings priority was having funds for emergencies (44%). Other top priorities included building wealth (34%) and having enough for a significant purchase such as a home down payment or vehicle (29%).
Meanwhile, 74% of midlife adults said it is “very or extremely” important for them to save enough money to be able to stop working eventually, while close to half (42%) of people in their 60s said they wanted information about making Social Security and Medicare decisions.
Well-Being Priorities
The research further revealed that a growing “cultural emphasis” on well-being came through especially strong among younger adults, who appeared more likely to define “health” beyond the physical body and reported more frequent engagement with mind/body activities, such as yoga and meditation.
For midlife adults, healthy habits tended to diminish as work and family obligations took precedence. As such, midlife adults reported the lowest exercise rates and said they ate healthily less often than any other age group. Behaviors to improve well-being became more common in later life as older adults focused more on healthy eating, exercise and family connections. That said, people across all age groups agreed, however, that they could be doing more to improve their well-being.
“While Americans are generally optimistic about their future, they may not fully appreciate how much their financial needs, priorities, and life circumstances will change over time,” said Dr. Joseph Coughlin, director of the MIT AgeLab. “More than ever, planning for longevity means understanding what matters most at each stage of adulthood, finding balance, and supporting priorities with the behaviors and actions that lead to a better future,” he further emphasizes.
