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
