The New Rules of Retirement

Retirement has morphed and changed in the 21st century, beginning with the Great Recession. Stocks plummeted, home prices dropped and unemployment skyrocketed. One of the lasting effects was the evolution of retirement.

Fast forward to today. The country is bracing itself for a shift in the workforce as the baby boomer generation moves toward retirement. This shift makes way for millennials and Gen Z, who make up the fastest growing groups in the American workforce. Now, they are continuing to shape the evolution of retirement. Along with the shift comes new rules of retirement income as well as policies, such as the SECURE 2.0 Act passed by Congress in 2022, that could have big effects on people’s retirement.

As people across generations consider funding their retirement years, everyone should take these new rules of retirement into account.

5 New Rules for Retirement Income

Home prices in many areas of the U.S. haven’t fully recovered from the last recession. The continually rising home values that retirees counted on in the past are no longer guaranteed. Furthermore, younger people are anticipating a rising retirement age, given the cost of living and housing. Retirement funding should consider this reality.  

Saving for retirement no longer means setting up your portfolio and forgetting about it. It requires a more hands-on approach, and we’re here to help. Farm Bureau agents know the ins and outs of which strategies will work for you.

1. People Are Retiring Later 

Baby Boomers have had to deal with job losses, falling home prices and investment portfolio losses, so retirement has been delayed for many of them. More than half of pre-retirees over the age of 50 as well as retired Americans say they’re considering delaying retirement or coming out of retirement and returning to the workforce. Implementing a retirement strategy early can ensure you’re prepared to retire at an age that you choose. 

1. You Can’t Rely on Social Security

The Social Security Administration’s Trustees Report of 2024 states that the cost of Social Security has exceeded non-interest income of its trust funds since 2010, and they anticipate that the cash flow deficit will continue to persist in subsequent  years. Depending on social security as your retirement income is no longer a wise plan. As retirement continues to evolve, it’s going to be up to the next generation of retirees to ensure that they have planned for their future financial needs. 

That said, the Secure 2.0 Act provided many new avenues for employers and employees to save for retirement. Check out the details and talk to your employer about how it might be put to use for you.

1. Selling Your Home Isn’t a Good Way to Get Money for Retirement

With home prices fluctuating along with interest rates, you can no longer count on selling your home as a way to fund retirement. You may want to consider downsizing as your home needs change. But it’s important to diversify your savings strategies and think about whether your home is the most reliable way to provide yourself with income after retiring.

1. A Longer Life Expectancy Means Needing Additional Savings

In a recent survey, respondents said they consider healthy lifestyle habits, such as a proper diet, regular exercise and preventive care, as a way to reduce healthcare costs. Healthcare expenses can be a major factor in retirement funding. Despite a greater focus on well-being by retirement-aged individuals, the longer retirees live, the more money they will need saved. Cutting back on non-essential expenses may help increase savings, but healthcare expenses and other necessary costs aren’t easily reduced. 

1. Managing Retirement Accounts Has Become More Hands-On

It used to be that you’d set up your retirement investments and just let them accumulate. But apps, tools and new types of investment accounts have made it possible for people to direct their own retirement plan, making choices about where to invest and when. In such an environment, it pays to have an advisor and educate yourself about the best opportunities for you, your needs and your values. 

Farm Bureau Can Help You Plan for Retirement

If you want to plan for your future, but you aren’t sure where to start, connect with a Farm Bureau agent in your area to discuss your future financial opportunities. Protect your family by finding the best retirement strategy for you!