The Evolution of Retirement

By: Mathew Greenwald
May 20, 2025

Over the past quarter-century or so, retirement has been evolving. For a growing number, it has bifurcated into two very distinct stages. These developments have largely been overlooked but have significant implications.

As late as a decade ago, when researchers at Greenwald Research asked retirees what they liked best about being retired we often heard “the alarm clock never goes off,” or “every day is Saturday.” When financial services companies marketed to retirees, they showed an older couple wandering aimlessly down a beach so often that the image became a cliché.

Retirement was seen as one stage of life and when people planned financially for retirement, they almost always planned for one unitary stage. Some saw a slow decline over time, in spending and in physical capabilities. These changes were considered small, incremental and continuous, with no major changes at any point, at least until there was a major illness or cognitive decline. But this period of ill-health did not, on average, last very long.

Nowadays, people leaving their work careers are increasingly seeking purpose, not leisure. They want to accomplish something meaningful. That something might be important societally or just to them individually. It may be a job or new career, it could be volunteering: but they want something that makes them want the alarm clock to go off and they do not want every day to be Saturday.

We can see this in a variety of ways.  Volunteering is up and likely to rise more. The forty-year decline in the age of retirement from the end of World War II to the mid-1980s reversed as people were and are less eager to enter a time of leisure.

But just as there has been a significant change in the first part of retirement, there has also been a significant shift in the back end. Life expectancy for older people is expanding. In 1960, the life expectancy of a 65-year-old man was 12.8 years. In 2021 it was 17 years. [1] There is, however, some evidence that the number of years retirees spend in bad health is also going up.[2]

Modern medicine has become effective at keeping healthy people alive long enough to get sick or cognitively impaired and keeping the sick and cognitively impaired alive longer. Chronic conditions such as diabetes, cardiovascular disease, and dementia are increasing. The US Center for Disease Control study found that, in 2018, 64% of people ages 65 and over have at least two chronic conditions and it is clear the incidence increases with age.[3]

People now spend an average of 10 years with chronic conditions, such as cancer, heart disease, or dementia, which is about twice as long as during the 1960s.[4]

For many, retirement has been replaced by two stages, which I call “Rewirement” and “Elderhood.” More and more people who leave work want to make new connections and seek new activities. “Rewirement” describes that better than retirement, which basically means “to withdraw.” The extended time with chronic conditions leads to lives that are far different than people visualize when they think of retirement and far different that the years right after people end their work careers. It is a time of limitations and medical care. It is not really leisure, it is better called Elderhood.

The evolution toward these stages has a variety of implications. I will briefly comment on retirement planning. It was easy to plan for a period of leisure. It does not take much to plan for nothing. But seeking a meaningful and fulfilling role after a long-standing career is a complex task. Ross Andel, a professor at Arizona State University who studies cognitive aging and retirement stated, “The plan cannot be ‘I worked so hard for so long that I’m going to take this long vacation and then I’m going to figure it out.”[5]

Planning for Elderhood is also hard. Some people curtail activities and can live on Social Security. Others need expensive care and support. Fortunately, a number of new and very attractive (and expensive) housing options for the elderly have developed, including senior housing and assisted living. Those who financially plan for this last stage can often find a way to afford this housing and care.

Those who do not prepare properly often have less attractive housing and, if they develop a need for long-term care, may be forced to move into a second-class nursing home where they spend their last years sharing a room with a very sick roommate and spending their children’s inheritance.

The replacement of “retirement” with “rewirement” and “elderhood” for many can make the golden years even more golden than before, but the need for effective planning has also evolved.

 

[1] https://www.statista.com/statistics/266657/us-life-expectancy-for-men-aat-the-age-of-65-years-since-1960/

[2] “Life spans are growing but ‘health spans’ are shrinking. What that means for your money” Greg Iscurci, October 9, 2024, https://www.cnbc.com/2024/10/09/life-spans-are-growing-but-health-spans-are-shrinking.html#:~:text=First%2C%20the%20good%20news%3A%20Americans,medical%20and%20financial%20experts%20say

[3] US Center for Disease Control, “ Prevalence of Multiple Chronic Conditions Among US Adults 2018, ” Research Brief, Volume 17, September 17, 2020, page 4

[4] Life spans are growing but ‘health spans’ are shrinking. What that means for your money” Greg Iscurci, October 9, 2024, https://www.cnbc.com/2024/10/09/life-spans-are-growing-but-health-spans-are-shrinking.html#:~:text=First%2C%20the%20good%20news%3A%20Americans,medical%20and%20financial%20experts%20say

[5] “Staying Sharp After Retiring Is Its Own Job,” Mohana Rayvindranath, New York Times, March 28, 2025

Leadership, Motherhood, and Family: Perfect Together

By: Lisa Greenwald
05/06/2025

As I embraced the role of CEO, my daughter was only four years old – and we were all in the midst of a global pandemic. Day in and out, my husband and I faced the same challenges and annoyances most working parents did during that time, including constantly questioning whether my time and attention was in the right place. Working parenthood is hard, and a topic I welcome doing more research on because 1) I live it and 2) it’s far too often dismissed as “normal,” despite its immense impact on health and financial wellbeing.

I don’t know that I truly understood what it was like to be a business leader and a parent, until I too, had to juggle all the competing priorities. Sure, I had read all the research reports on the topic, but until you live it yourself, you don’t necessarily appreciate the importance of time management, spousal communication, delegation, and of course the feelings of “guilt.” The experience of being a working parent and its emotions were sometimes overwhelming. I wondered if I was the best mom I could be to our daughter and if I was the best CEO for the business.

I remember quite well though, a moment of parental fulfillment and professional clarity, when our daughter then in kindergarten filled out a worksheet that said: “A leader is…my mom.” To know my daughter is growing up with female leadership completely normalized made it all feel worth it. Greenwald operates in industries that have been historically dominated by men. There are amazing women in this industry who forged the way and succeeded before I was even out of school. And yet, when I entered the industry, I was often one of only a few women in the room. That my daughter so naturally and intuitively accepted that her mom was “boss” felt like a generational changing of the guard. A mom can be a leader in so many ways.

Being a working parent has ultimately been far more fulfilling than challenging (with a quick shout out to my husband for keeping the challenges to a dull roar and putting out a few fires). But I will eventually find myself in another common position – one that we do quite a bit of research on at Greenwald. I will be in the sandwich generation (not a generation but a life stage). In the years ahead, I will, in addition to having a school-aged child, become a caregiver to one of my parents, stepparent, or in-laws, and potentially to all of them, simultaneously. My husband and I are so fortunate to have all five parents/grandparents in our lives, but we know the future may not always be as it is now. And then we too, like so many others, will have to navigate being a caregiver to an aging loved one, while parenting a dependent child. Once again, all those studies I have read and produced will have new meaning.

Being a research professional who routinely discusses longevity risk, the burden of unpaid caregiving, and the implications of having a good versus non-existent end of life plan, you can imagine it’s a more comfortable conversation to have with my family. My father, Matt Greenwald, and I can be almost clinical. We know what the stats mean and the likely outcomes. Matt and I tend to be very fact-based when we have discussions and rarely emotional. (As you might imagine, the cold hard facts and research about the likelihood of living another 10 years or needing LTC don’t land quite as well with my in-laws.) But just like being a working parent, when I’m forced to live in those moments, all those stats and research aren’t going to help much when the hardest days come.

In many ways, however, my role and my research has helped prepare me, as I move through my multiple roles as a leader, mother, and an eventual caregiving daughter. I strive to do the best I can with all the different “hats” I wear. The learnings of research and family experiences have molded me into the researcher and leader I am today.

The Human Side of Leadership: The Human Side of Layoffs

By: Lisa Greenwald
04/29/2025

I inherited a healthy business and within a few years – like someone flipped a switch – things slowed. It wasn’t just us; research firms of all sizes and specialties experienced a couple of bad years. However, knowing I wasn’t alone didn’t really take the worry and guilt away.

Managing through and dealing with a change of staffing — “downsizing” your team – is something you never want to be faced with. There is never a right way to handle these decisions. They are difficult, from building a contingency plan to ensure business and client care continuity to knowing you are making decisions that will significantly impact the team you have built and who share your vision and goals.

Conducting a significant layoff in a small company has proven to be the most difficult and taxing experience of my career. I knew and cared about the people being laid off; they were my friends and mentors. To this day, my brain knows it was the right thing for the business and the remaining team, but my heart wishes it could’ve been different. I can’t imagine layoffs are easy at any company, but I assure you it’s complicated beyond what I can express, when you’ve quite literally grown up with your colleagues.

What I gleaned from the experience is that I will always be a leader who cares about the team Lisa Weber-Raley and I have built. They have helped build the very brand experience our clients have come to expect when working with us and we strive to deliver to them so they can achieve their business goals.  As Lisa has said many times to me “our people are the Greenwald brand” and that is what made this even more difficult for both of us, as we both believe in the people who shape our success every day.  I learned a lot from this experience. In downsizing, we had to use cold objectiveness and reason to sustain this amazing company, but privately, I hope to always maintain the emotional side, to always care. I don’t ever want to be the type of business leader that loses sight of people.

Maintaining a positive and optimistic outlook in the face of challenges is not only personally demanding but also critical for leading a team effectively. It was a hard thing to do when the chips were down, and it is the area in which I continue to need the most work. When my or my management team’s morale is down, the whole team feels it. When we stay positive, we can overcome these challenges, emerge stronger, more resilient, and ready for the next chapter.

There will be good times and times of challenge. It helps to be “battle-tested” — it gives Lisa and I the perspective we need to navigate the firm through all circumstances, staying true to who we are as leaders, and respecting the culture of collaboration and teamwork we have built within Greenwald.

Battle-Tested and Leading Through Uncertainty: COVID-19 and Data Deterioration

By: Lisa Greenwald
04/22/2025

As I mentioned to you in my last blog, when I first took over Greenwald as CEO nearly five years ago, a mentor and colleague called me and my business partner Lisa Weber-Raley, our chief research officer, “battle-tested.” Reflecting on my twenty years with Greenwald and my first years as CEO, “battle-tested” takes on a positive connotation of strength and resilience. (If you haven’t seen Lisa and I in action, alone or together, we’re some smart, tough cookies).

The Uncertainty of COVID-19

One of our most significant tests of leadership came to us immediately, in 2020, during the COVID-19 pandemic. I took the company’s reins in September 2020, which was a very stressful time for our company and our clients. We were not immune to the challenges of that time, and it was a test not only for us as a firm, but also for our clients navigating the same challenges we were confronted with. Living and working through the uncertainty of the pandemic, our initial objective was to ensure the continuity of operations, a feat made possible by our dedicated tech team’s meticulous contingency planning and technological advancements. As we watched many small businesses falter, we persevered.

However, the real challenge lay in preserving our organizational culture and fostering camaraderie in a virtual work environment. While the lockdown initially brought my team together in solidarity, the shift to remote work posed unique challenges in maintaining engagement and preventing the onset of meeting fatigue and lower productivity. As an entire team, we continue to work to find the right balance. I know this is an issue that many business leaders face, as companies are beginning to sort through a remote, hybrid, or in-office work environment (If you figure out the answer, I’m all ears).

Navigating Data Deterioration

In the same timeframe, we also managed through the decline of panel and sample data quality. In the research world, observing the deterioration of data quality and its impact on the morale of my dedicated and curious team has been challenging. My team wants to deliver the best for their clients, and outside forces were making us question our results and even the future of our profession. Balancing the pursuit of good results for our clients with the evolving landscape of data quality is an ongoing challenge that requires adaptability and strategic thinking. My team persevered again. We found new partners, using best-in-class quality procedures, developed our own playbooks to combat poor quality, and even built our panel of financial and insurance professionals where we could control the quality of engagement. Once again, we met a challenge and came through the other side of it with solutions and ultimately a better strategy and work product to meet our clients’ needs and enhance the overall experience our clients, both existing and new, will have when they engage with Greenwald.

Staying True to the Vision

The same mentor who described Lisa and me as “battle-tested” was the one who taught us to write a vision and engage in ongoing strategic planning. Visions are cheesy, right? That’s what I thought. Now, I think, for leaders, they are a note to our future selves about what we’re doing and why. It’s our guiding light, most notably when we think we’ve lost our way or times are hard. Staying true to our strategic vision, even during trying times, is essential. That sense of directional purpose and wisdom helped us navigate some challenging times early on in our leadership journey. I advise everyone to make the time to create the vision and plan to help you stay the course and reach your goals.

As I celebrate two decades with Greenwald and the firm celebrates its 40th anniversary, I am grateful for the experiences that have shaped me. As a relatively “new-ish” CEO, I have learned so much from the challenges we have faced. I am so fortunate to work with a team of accomplished research professionals. And I get to lead us forward to the future, along with my tremendous partner, Lisa Weber-Raley, to move us through new challenges and build opportunities. We always come back to the vision, which evolves strategically as well. We are a part of and partners to the health and wealth sectors. We connect people to the answers they need to achieve their vision. We will continue to share what we know, and learn what we don’t to help others succeed and reach their goals.

Taking the Reins of Greenwald

By: Lisa Greenwald
04/15/2025

As Greenwald Research celebrates its 40th anniversary year, I thought it would be a good time to reflect on my twenty plus years of experiences with the company. Nearly five years ago, I became the CEO of Greenwald Research. At that time, a mentor and colleague called me and my business partner Lisa Weber-Raley, our chief research officer, “battle-tested.” As I reflect on my twenty years with Greenwald and my first years of leading the company as CEO, “battle-tested” takes on a positive connotation of strength and leadership, and female leadership. Lisa and I know what a privilege it is to be able to move this reputable company forward but there are times I wish we weren’t so battle-tested…I will have more on that in future blogs in this series.

It is, without question, an honor to lead the company built in your family name. But leading a company “your dad” built and filling his shoes is not easy, especially since “dad” (I prefer to call him Matt) is a recognized expert in retirement research, is still with the firm, and now works for me.

The key mission and vision for the firm hasn’t changed much over the years. Greenwald has always sought to be a partner with industry leaders and experts to drive understanding and insights into action. We have always strived to help advance ideas and opportunities our clients have thought of, and to develop and bring new ideas forward that they haven’t. Since our inception in 1985 to today, our clients and the industries we serve have always been our North Star – we serve organizations trying to make positive contributions and changes in critical areas of American life – health and wealth.

As clients evolve to navigate the ever-changing needs of their businesses and clients, Greenwald has always been able to pivot within the industries we are a part of and grow along with the health and wealth sectors.

In our business, as with our clients’ businesses, relationships matter. At Greenwald, family relationships matter too, not just for me and Matt, but for every team member who deserves a healthy balance of both. But for a moment…imagine what our family dinners are like…Greenwald business will inevitably come up in conversation, and Matt and I can go on for some time about the firm – or fun topics like life expectancy/longevity, Social Security, the underappreciated HSA, and the finer points of DC income solutions — while our other family members wait patiently for us to “pass the potatoes.” But through it all, we have leveraged strong mutual respect to evolve as business partners and maintain a (somewhat) normal work/life balance.

Navigating a family business is not always easy. To some, I am merely “Matt’s daughter,” a title that intertwines occasional insult and genuine honor. Collaborating with family members demands a foundation of mutual respect. Matt and I planned Greenwald’s leadership transition for years. In the process, we disagreed, but not too often. At times, I admittedly took for granted the wisdom of a man who built the successful company and stellar reputation I now hold in my hands. I’ve since learned the errors of my ways. Our leadership transition came with pressure too. I used to joke I had big shoes to fill and had to do so with much smaller feet and in high heels – until I gained the confidence to forge my path (and realized flats are a lot more comfortable than heels anyway). Anyone who knows Matt and I can point out the many differences, but those who know us well can see important similarities and mutual respect for both.

Greenwald Research has met the changing dynamics of the business and our clients. Over the years, we have grown with our clients, and I am so grateful to have been able to witness the growth of the company as I grew as a professional to where I am today, privileged to be leading a team of professionals who bring their best to everything we do to meet the needs of others.

Enrollees Lack Basic Health Plan and HSA Knowledge. Can Employers Help?

By: Sara Rubinstein
4/3/2025

Our 20th Annual Consumer Engagement in Health Care Survey (CEHCS) was conducted during open enrollment season in the fall of 2024. Through a new addition of presenting a series of True or False statements to gauge true understanding of aspects of an employee’s health insurance plan, we found that employees don’t understand as much as they think they do.

There is a Gap in Understanding Health Plans

Overall, nearly 9 in 10 enrollees feel they understand the health plans offered to them. Additionally, 56% are extremely or very satisfied with the ease of understanding the terms of their coverage, with an additional 3 in 10 somewhat satisfied.

However, when asked the True or False questions about their health plans, actual understanding varied. Overall, about half (48%) answered 3 or 4 correctly. Enrollees generally understand deductibles and monthly premiums but are confused about out-of-pocket maximums and different prescription pricing. High Deductible plan members fared better, with 63% answering at least 3 out of the 4 statements correctly, compared to 44% of Traditional plan members.

Those with a household income under $50,000, those younger than age 45, urban dwellers, and men were more likely to answer these statements incorrectly than their counterparts. Those who purchased their health plan directly rather than through an employer and those more satisfied with their plan were also more likely to answer incorrectly.

HSAs are Often Confused with FSAs

Though reported familiarity with consumer driven health care plans remains high (66% of Traditional plan members and 76% of High Deductible plan members are at least somewhat familiar), other results suggest otherwise. When we asked why those offered a Health Savings Account (HSA) but did not open one why they did not open it, a top reason was disliking the “use-it-or-lose-it” rule, which does not apply to HSAs.

We also asked a series of True or False statements about Health Savings Accounts. We found that HSA literacy is worse than overall health plan literacy. Overall, only a quarter answered 3 or 4 correctly. Enrollees generally understand that an HSA can pay for expenses in retirement and about half know you don’t lose it if you leave your job. But fewer know the funds can be invested in mutual funds or that you cannot open one regardless of plan type. Not surprisingly however, High Deductible plan members were more likely to answer correctly, though knowledge is still low, with 32% correctly answering at least 3 out of the 4 statements correctly compared to 22% of Traditional plan members.

Those with a household income under $50,000, women, and those without a college degree were less knowledgeable about HSAs, as well as those in worse overall and mental health.

Employers Can Help Bridge the Gap

As we’ve seen in previous years of this survey, most enrollees spend less than two hours deciding on their health plan during open enrollment, including half who spend less than an hour.

Employees may not be giving their health plan selection the attention it needs. They generally feel satisfied with their selection process, including 62% who report feeling very or extremely satisfied with the information available to help them understand their choices. And we saw earlier that they felt they understood their choices well. Yet, we see a disconnect as they answer basic questions about their plans and coverage incorrectly.

Employers have an opportunity to do more to help their employees with their selection. Hopefully in the future, we’ll see employees spend more time choosing the right plan for them, leading to a higher level of knowledge of what their plan options cover and how they work.

About the Survey

The Consumer Engagement in Health Care Survey (CEHCS) is a survey of privately insured adults conducted by the Employee Benefit Research Institute (EBRI) and Greenwald Research, an independent research firm. The survey has been conducted annually since 2005. The CEHCS provides reliable national data on the growth of consumer-driven health plans and high-deductible health plans and their impact on the behavior and attitudes of health care consumers.

Organizations supporting this year’s study include Blue Cross Blue Shield Association, CareFirst, Cigna, HealthEquity, Inc., Inspira Financial, Johnson & Johnson, Segal, TIAA, and Wex.

The 2024 survey of 2,011 individuals was conducted using Dynata’s online research panel between Oct. 24 and Nov. 25, 2024. All respondents were between the ages of 21 and 64. The national sample is weighted by gender, age, income, ethnicity, education, and region to reflect the actual proportions in the population.

Major findings from the research are available here.

Optimizing Thought Leadership Programs

By: Mathew Greenwald
10/1/2024

Thought leadership research studies are widely used by asset managers, distribution companies, and insurance companies. The belief in the value of these studies is strong. My firm recently conducted a survey of executives in retirement companies and asked them about expected use of eight marketing tools. Seven in ten said they expected their use of thought leadership research to grow over the next three years, more than for any other marketing tool or process.

Despite this widespread use, it is my firm’s observation that thought leadership programs often do not achieve their potential benefit. To be most effective, thought leadership initiatives should achieve three basic objectives:

  1. Impact an audience that is important to the company.
  2. Study a topic that is both important and challenging to the target audience. The study should be on a topic that the target market wants to address more effectively.
  3. Provide information and insights that help the audience achieve their objectives.

There is one obvious reason for the need to provide information that helps the target audience meet its objectives: financial professionals, consumers, and other possible targets of thought leadership want to do better on key endeavors and will value those who provide information and insights that help them do that. The days of providing information that is simply “nice-to-know” are long gone.

Unfortunately, I have seen thought leadership efforts that do not appear to have been designed to meet these objectives, but designed only to produce information that is interesting or get press attention. My main concern is that studies conducted for this purpose do not provide the value that can be achieved by the same level of expenditure as a more effectively designed and executed study.

To get the highest potential impact, three key steps are needed.

  1. Impact an audience that is important to the company.

First, it is important to identify a target audience for the thought leadership effort that will provide maximum value to the company. Sometimes the target can be very narrow, such as a particular distribution channel that a company wants to penetrate: Pure RIAs, for example. Sometimes the target can be broader, such as financial professionals from all channels who have clients in the company’s target market: for example, financial professionals with clients who are retired. It is important that the target for the thought leadership effort not be too broad, however. The target can be a segment of consumers, but thought leadership programs aimed at all consumers tend to be too broad and generalized in the value they provide.

A segment of financial professionals is often the target of a thought leadership program because that is where the benefit to the financial services company is most direct. Information from an effective thought leadership program can help wholesalers and others get access to financial professionals and give them a value add that will enhance the relationship between the financial professional and the wholesaler or the company.  It can help company representatives get invitations to make presentations to a financial professional’s clients. It can enhance the image of a company. It can motivate a financial professional to share publications of research findings with their clients thereby producing value for the financial professional and end consumer.

  1. Study a topic that is both important and challenging to the target audience.

The second step, as stated, is to choose a subject that goes beyond being simply interesting. It should be on a complex issue the target audience is, to at least a certain extent, struggling with. Examples include how financial professionals can best formulate relationships with their clients’ adult children, how they should establish asset level goals for retirees, or how consumers should formulate goals for their retirement years.

  1. Provide information and insights that help the audience achieve their objectives.

The third step is, in our opinion, the most differentiating. There are many studies, maybe most particularly in the retirement area, that provide information which is interesting but simply do not provide new insights that help the target audience better meet their objectives. One example is the many studies that indicate that many are not saving enough for retirement. These studies are often interesting, but they would be a lot more effective if they helped financial advisors better motivate or guide their clients or helped develop new tools to help individuals better assess how much they should save to meet, or set, lifestyle goals in retirement.

Understanding Your Target Audience for Thought Leadership

A good thought leadership study will go beyond producing interesting information: it will help the target audience better meet their goals. Financial professionals, pre-retirees, and retirees, for example, face a number of challenges. A good thought leadership study will help them address one of those challenges.

Designing research that produces this benefit requires a deep understanding of:

  • the issue being confronted, such as retirement planning
  • how the issue is now being addressed and areas in which improvements should be made
  • the target audience’s satisfaction with current approaches and their interest in new ideas

With these understandings, thought leadership programs can be constructed that provide very significant value.

Life’s Persistent Questions #6: How Big is the Life Insurance Coverage Gap?

By: Eric Sondergeld
9/23/24

The name Life Insurance Awareness Month (LIAM) implies that some may be unaware of the benefits of life insurance and why or whether they may actually need it (or need more of it). There is certainly plenty of evidence that many Americans are un- or under-insured. This begs many questions. How many people are we talking about? How much do they need? Who needs it the most?

Greenwald Research developed a model to estimate the size of the gap in the U.S. The model follows a “typical” life insurance needs calculator. While the model assumptions can be adjusted in a variety of ways, the base model assumes 7 years of replacement income (not to exceed age 65) for anyone with dependents, full debt repayment, and $15,000 for burial/final expenses. The model then subtracts any existing financial assets and life insurance coverage to come up with a need.

The model suggests that 83.5 million U.S. households (representing 64% of all households) collectively have a gap of $33.2 trillion in life insurance coverage. This is the most conservative version of the model. A valid case can be made for any of the model scenarios below. In fact, replacing income to age 65 is one way to define human life value.

Sticking with the base model, let’s explore where some of the biggest opportunities lie.

Where are the largest gaps?

  • Those with at least some life insurance have a larger gap ($19.2T) than uninsured ($14.0T)
  • Mid-late career households ages 30-59 have a gap of $28.2T
  • Similarly, Millennials ($14T) and Gen Xers ($14.7T) have the largest gaps
  • Those who are married/partnered make up nearly the entire gap ($29.4T)
  • Households with children make up the majority of the gap ($22.0T)
  • The income replacement component results in households with higher incomes ($150K+) representing half of the gap ($16.4T)
  • White households represent $23.0T of the gap
  • Those with access to a financial professional ($18.7T)

These numbers are driven by higher average individual gaps than the sheer numbers of them. In fact, they look a lot like the people most companies are reaching or at least targeting today.

Selling life insurance to more of the same kinds of people will certainly help reduce the gap from a dollar perspective. However, it would have a much smaller impact on reducing the percent of households who need life insurance and, whose dependents arguably have less of an existing safety net if one of the household’s breadwinners were to pass away prematurely.

Which groups are most likely to have a gap?

  • Those with no life insurance at all (77% have a gap)
  • Those under age 40 (82%)
  • Millennials and Gen Z (82% of each have a gap)
  • Married/partnered households (67%, which is close to the overall 64%)
  • Households with children (78%)
  • Lower income households earning less than $50K (74%)
  • Non-white households. Hispanic (85%) and Black/African American households (74%) are most likely to have a gap.
  • Those without access to a financial professional (76%)

Some of these overlap with the gap size, especially when they have characteristics that imply a life insurance need, such as age, marital status, having children. These factors are combined in the chart below. There are millions of households needing life insurance throughout the entire lifecycle, which suggests there are opportunities for a wide range of products and uses.

Making meaningful progress in closing the life insurance gap will require efforts in each of these areas, especially among those not explicitly shown on this chart. These include finding ways to engage with minority households, lower-income households, and those who don’t have ready access to an advisor. Where will your company define its niche?

Life’s Persistent Questions #5: Can We Make Life Insurance the Income Replacement Solution It’s Meant to Be?

By: Eric Sondergeld
9/10/2024

Check out almost any life insurance needs calculator and it is obvious that the largest component of the answer is an amount representing some multiple of income. Amounts are also typically included for immediate payoff of outstanding debt, college education, final expenses, and even items such as childcare and an emergency fund.

Other than digitizing these formulas in the form of online calculators, the theory behind them has remained largely unchanged for decades. Before that, we likely used rules of thumb of income multiples, many of which are commonly used in practice today. I see two main problems with this approach to estimating life insurance needs. First, the amount becomes quickly outdated. As time passes, fewer years of income replacement are needed, children may no longer be dependents, incomes have grown, debt gets paid down, or a larger home is purchased with a bigger mortgage, etc.  Second, if income replacement is indeed the largest component of the life insurance benefit, then why is the benefit not paid as an income?

There’s a way to address both of these issues. The first requires an admission that there’s a fair amount of double-counting going on in the current approach. If life insurance provides replacement income (whether paid in a lump sum or over time), that income presumably is currently being used to pay down debt, save for children’s college, etc. I can’t believe nobody has stopped to ask, “why do I need to replace my income AND some of the things it pays for?” or “Why is 10 years of income replacement the norm?” The second is to change the terminology from “death benefit” to “income amount.” If life insurance is to truly be an income replacement product, we need to present it and talk about it that way. For products intended to primarily replace income, we might eliminate the term “face amount” from our vocabulary. Instead, the conversation should be about how much income is needed and for how long.

The how much starts with your annual income and subtracting an amount for taxes (since the death benefit is not taxable) and perhaps a bit more since the income won’t need to support the insured after he or she has passed. In addition, an assumption for income growth can be incorporated. The length of time could be a number of years or, preferably, to a specific age. For example, a 40-year-old whose youngest child is 10 might expect to support that child until they reach age 22 and are out of college. That parent might buy coverage that replaces their income until they are 52. Another example is to replace income until an expected retirement age if there are one or more members of the household (or household expenses such as mortgage payments) reliant on that income. The life insurance benefit would be expressed as a monthly amount, just like with disability income insurance.

In fact, all the above ways of defining the benefit already exist within the disability income market. And like disability income insurance, the concept of face amount is a foreign one. The only remnant of one in this approach might be allowing for a modest lump sum benefit to cover final expenses. An added benefit is that the life insurance conversation dovetails nicely with the disability income insurance conversation. Creative companies could even develop a combination product that replaces income until retirement age, potentially at different amounts depending on whether the insured is disabled or dead.

Presenting life insurance as an income replacement solution offers the following additional benefits:

  • The death benefit and its intent become clearer to beneficiaries, as it’s simply a continuation of the income that has supported them all along.
  • Beneficiaries don’t have to figure out how to manage a lump sum payment, something people are generally not great at doing.
  • It simplifies the conversation and removes complicated factors like amounts for debt and education and having to decide whether the income replacement (that is paid as a lump sum) should last (or more accurately, represent) seven, ten, or twenty years.

Making life insurance the true income replacement vehicle its meant to be requires a shift in thinking, benefit calculation, and terminology. Its positives are clear and can make purchasing life insurance easier for customers.

Are Workers Better Off At Home?

By: Sara Rubinstein 2/27/2024

The number of U.S. workers returning to the office is increasing. The results from the 2023 EBRI/Greenwald Workplace Wellness Survey show that six in ten workers never work from home, up from 49% in 2022 and 41% in 2021.

But as workers return to the office, a troubling trend is emerging: Down from six in ten last year, only half of all workers report being extremely or very satisfied with their job overall. Overall health and emotional well-being are also down. Is an increased return to the office having a negative impact on workers?

In-Person vs. Remote Work Trends

When it comes to work-life balance, in-person workers feel worse: only 30% describe it as excellent or very good compared to 45% of remote workers. In-person workers also rate their overall health and well-being worse than remote workers. However, in-person and remote workers do not greatly differ in job satisfaction, with roughly half feeling extremely or very satisfied overall, and nine in ten being likely to stay with their current employer for the next two years.

In general, those who give a low rating regarding their overall health and emotional well-being are less likely to be satisfied with their job. So, if there is a difference in well-being between in-person and remote workers, why isn’t there a difference in job satisfaction? What else could be causing 2023’s decrease in overall job satisfaction?

Perhaps it has to do with when workers returned to an in-person setting. Workers who returned to in-person in 2023 are less likely to rate their well-being highly than those who went back to the office earlier. One hypothesis is that there is a brief reacclimating period that former remote workers must endure before their well-being returns to baseline levels. While this is an intriguing theory, there is still no difference in overall job satisfaction (49% vs. 51% in 2022 and 2021).

We also see that the gap in overall health and emotional well-being between in-person workers and remote workers is closing slightly, suggesting that something other than a return-to-office is responsible for lower health, well-being, and job satisfaction scores in 2023.

If 2023’s job satisfaction decrease is not driven by more employees returning to the office, the question why in-person workers rate job satisfaction on par with remote workers but rate well-being metrics lower still persists. Perhaps the nature of the work being done plays a role. Are workers in industries with fewer remote work opportunities less well?

The Impact of Industry

When the pandemic hit, not every worker could stay at home. Many industries required workers to stay in-person or return earlier than others, including healthcare, education, retail, food, hospitality, manufacturing, construction, transportation, and agriculture. How do these workers feel?

Compared to all others, these industries report worse work-life balance and are less likely to say their financial well-being is excellent or very good. Those in retail, food, and hospitality stand out even among other primarily in-person industries. They are least likely to stay with their employer, report worse work-life balance, are least satisfied with their job overall, and are least likely to say their well-being is excellent or very good. Similarly, healthcare workers also have relatively poor work-life balance and poor emotional and financial well-being. However, healthcare workers are more satisfied with their job overall.

So what does this mean overall? We know that job satisfaction and the well-being of workers is down. In-person workers report worse well-being and more people are returning to an in-person work setting. But their job satisfaction remains unaffected. What else could be causing this decrease? Is there something else happening to these workers that needs exploring? Or is it too soon to see the effects of this shift in work setting? It will be interesting to watch how remote work continues to impact workers’ well-being and job satisfaction overall.

To learn more about worker well-being, please view the 2023 Workplace Wellness Report released by Greenwald Research and the Employee Benefit Research Institute (EBRI) or watch Greenwald Research’s coffee break on workplace wellness.