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Slow Retirements, Personal Debt, and More: Jonathan Grocott on the Newest Retirement Planning Trends

Expert Jonathan Grocott with Wealth Preservation Associates knows it’s an interesting time for retirement planning right now. Economic changes are yielding more uncertainty, the aftereffects of COVID-19 are still being felt, and many soon-to-be retirees are rethinking how they want to spend their years after work. Several new trends have emerged in this challenging time as workers seek new strategies, investments, and retirement options. Here are several of the most interesting.

More Holistic Financial Wellness

Holistic financial wellness is a growing approach that includes several important aspects. Jonathan Grocott notes that more and more retirement plans are including:

  • Education on investment funds and how they work
  • Multiple investment paths, including index funds and real estate
  • Easier ways to personalize investments
  • Credit counseling for borrowing money
  • Emergency savings
  • Plans with more focus on paying down current debt, especially student debt

While this approach is particularly useful for younger generations, it’s also helping older workers customize their retirement investments, think about the future, and make more direct plans.

Slow Retirement

Confronted with inflation and more complicated retirement planning, a growing number of workers are planning on slow retiring, a trend where they work passed when they intended, gradually phasing out their work life. Slow retirement aims to qualify for health insurance as long as possible and work on supplemental income that’s not a drain on precious retirement investments.

There are pros and cons to this approach: It’s not always possible, phasing out of jobs creates new difficulties, and it restricts income from young workers desperate to enter the workforce. However, it can also be a valuable way to maximize retirement savings for those who are still capable and in good health.

Willingness to Adapt

COVID-19 and other forces have quickly shown workers that their retirement plans aren’t set in stone. Looming challenges, such as potential social security financial woes and climate change, could create far more problems than simply high inflation. As a result, Jonathan Grocott explains that workers are becoming more pragmatic about their retirement planning. That’s leading toward more investment in assets like real estate that aren’t as dependent on the market to hold value and more people willing to work second jobs specifically for saving up.

This trend also means that younger workers, in particular, aren’t afraid to move to places where they can save more easily. This is especially true with the rise of remote work, which creates more flexibility and the potential for more sources of income.

A Renewed Focus on Lifetime Income

While pensions are out, a new concept is starting to emerge in some sectors – “lifetime income” as part of contribution plans at work. This approach uses a pension-like plan that includes in-plan annuities guaranteed to pay out income during retirement. It can also convert previous savings and contributions over to models that focus more on annuities like these. This approach may not be quite the same as pensions – which don’t appear to be coming back – but Jonathan P Grocott sees it as a modern substitute that reaches similar goals.