Preparing for a Better 40-Year Retirement Journey (13:22)
As the number of centenarians is increasing, U.S. workers are retiring earlier than planned, further lengthening retirement
Broadcast Retirement Network’s Jeffrey Snyder discusses the impact of human longevity on retirement planning with Manulife John Hancock Retirement’s CEO, Wayne Park.
Jeffrey Snyder, Broadcast Retirement Network
This morning, preparing for a better 40-year retirement journey, joining me now is Wayne Park. He’s the Chief Executive Officer for Manulife John Hancock Retirement. Wayne, great to see you.
Thanks for joining us on the program this morning.
Wayne Park, Manulife John Hancock Retirement
Thank you for having me. It’s great to be here.
Jeffrey Snyder, Broadcast Retirement Network
Yes, it’s great to talk to you. I love this longevity and financial resilience report. It’s got a lot of great information.
Let’s start with some basics, though. From what I’ve read, the top line is that many people that are retiring, they expect it to work longer, but they’re actually perhaps retiring sooner than expected.
Wayne Park, Manulife John Hancock Retirement
Yes, I think that’s one of the key insights, and we’ve been doing this for over 10 years. I think this is our 11th year, and the insights vary. I think, first, starting with the good news, people are living longer, almost 80 years life expectancy.
When we talk to people about, wow, that’s a long time, how are you going to afford that retirement? I think the general answer, most often given, is that, hey, I’ll just work longer. That’s also common advice people get.
What you pointed out is the insight, because you may plan to retire and work later, but that may not be up to you. I think about half the people retired earlier than they thought they would. The reasons are what you expect, job loss, probably healthcare.
The third piece that a lot of people don’t think about, which reports like this helps to uncover, is that they may have to retire early because they have to provide care for other people, a loved one, family, or friend. That’s just not on their radar.
Jeffrey Snyder, Broadcast Retirement Network
This is the 11th year of the survey. You have a great partnership with the MIT Aging Lab. How does that relationship help you and the organization, or more importantly, Manulife, John Hancock, think about retirement, and planning the retirement platform, the devices, the technology that you’re going to put forth for not only today, but also 5, 10, 20 years down the road?
Wayne Park, Manulife John Hancock Retirement
Yeah. Thank you for asking, because as a retirement provider, we’re taking it a step further. This broad concept of longevity, the life expectancy is, I think, 79.
We expect that to grow. There’s a study that suggests someone that’s going to live to 130 was born already in 2025, which is a whole other thing to think about. It may not be even a 40-year retirement.
It might be a 70-year retirement, so decades of retirement. As a retirement provider, we’re not just talking about the administrative things and the investment, but really longevity as a broad topic. In doing so, you mentioned this particular study.
We’ve been doing it for 11 years, but we’ve engaged partners like MIT Age Lab two years ago to do a study with us and partnering with our insurance company. They came out just about a month ago with a whole new longevity preparedness index, which is different from being ready. What that study told us is, hey, health and wealth, people think about, talk about, make sense.
There are six other domains that in order to be fully prepared to live that longer life that you need to think about and prepare for, things like your home, your social network, what’s your daily activity. We learned that U.S. Americans, we’re probably least prepared about providing care or getting care because either way, you’re going to do it, and we’re just not talking and thinking about it. There’s multiple domains, eight in total, that if you can address those topics with your family, and this is another place where the financial advisor could play a really big role because that study told us, if you talk about longevity as a concept beyond just the investment, there’s a seven-point lift in Americans being better prepared for that longer life.
I know I went longer there, but it’s an exciting subject for us because we think about longevity holistically, so much so that we just also announced at our parent company level, Manulife, we’re standing up a longevity institute ourselves so that we can do this particular research, partner with organizations like the MITH lab and others like the Milken Institute. So it’s not a one and done, but something that we’re committed to holistically for a long time.
Jeffrey Snyder, Broadcast Retirement Network
Yeah. I guess longevity could be considered a double-edged sword. It’s good for the individual.
It’s good to live longer, but you’ve got to plan and save for your future. I know your firm is heavily involved in that. Let me ask you about financial planning.
How important is it to have an advisor, a consultant, someone who understands the big picture to work directly with the individual? We’re in the age of AI where they can actually replicate an actor or an actress now on the television screen, but does that replace the retirement plan advisor and is that person really necessary to help achieve these retirement goals?
Wayne Park, Manulife John Hancock Retirement
People that did work with a financial professional are much better prepared for their retirement. And that’s probably pretty obvious, right? If you have access to a professional financial advisor that can really help you prepare for that longer life, whether it’s finances and otherwise, because a financial advisor that takes it one step further, takes it beyond like an investment asset allocation and talks to their clients about all the different ways they can help around this concept of longevity.
Our research tells us that they’re even better prepared. Having said that, I know many folks don’t have maybe an access to a financial advisor and that shouldn’t stop them from thinking about this holistically because there’s other sources. So retirement providers like us, certainly a lot of education pieces come from your employers, right?
That’s why the 401k and participating in your retirement plan at your employer is so important because you can get access to these resources. And I guess to your question about AI, we’ll see. I certainly try some things and getting access to any information, even thinking about and getting engaged in the topic, I think our research would suggest that you would be better off and more prepared than maybe someone who just puts their head in the sand and says, I’ll worry about that another time.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, you know, at this point, you know, in our points in our lives, it really doesn’t make sense to put a lot of things off and starting earlier, you know, I just think back to the value of compounding, right? That’s a very simple principle. If you start early enough and save, you’re going to be certainly better off than someone who maybe saves at the last minute.
Let me ask you about generational perspectives because you mentioned some of the research about longevity and how that factors into retirement. But I’m a Gen Xer. So I’m kind of I’m up there.
My parents are boomers. But does the perspective vary for the different generations?
Wayne Park, Manulife John Hancock Retirement
It does. And for reasons that I’m also a Gen Xers that you would think, right, we’re right in the square in the sandwich for most Gen Xers generation where you have to think about multiple layers of the sandwich, right? Perhaps you’re taking care of your parents that may be retired.
You’re taking care of your children, getting them set for college adulthood, and then you have your own retirement to think about. So generation insights do vary. I’ll go down just a couple of things for each generation.
So I have two kids in Gen Z. And it’s funny you mentioned the compounding. That’s exactly what I told them this past weekend.
I don’t it doesn’t matter if it’s $100, $50, pay yourself first, make it automatic, get it out deducted from your paycheck because the earlier you start, they have the biggest asset, right? Time, time for that dollars to compound. And if your company has a match, even better.
So the Gen Z, they’re the youngest. I mean, it’s kind of scary to think about my kids being in the workforce, but they are. They’re the youngest members of the workforce.
And they’re probably feeling the financial pressure of being an adult. And that came through. They feel they’re focused on just their day to day expenses, as you would expect.
The longer term seems so long ago. So I think the advice to that Gen Z is to start early, no matter how small, and get going. The millennials, half of the millennials money situation, I mean, they’re saying through our research, they’re in a pretty decent spot.
And despite working more years, they feel like they’re much further behind in their retirement. So I think millennials have a little bit more experience to say, I’ve actually thought about retirement. I understand my financial situation and more recent economy.
And they’re certainly a bigger concern about their financial situation and more specifically around debt, right? Because they’re probably in adulthood, pick out some college loans and then personal loans, and perhaps even the first home mortgage. And all that feels very burdensome.
So they’re squarely in the concern stage. We just talked about Gen X, just balancing across multiple goals. And then the baby boomers, perhaps this is also because they’re in retirement.
That’s better off compared to the other generations, right? Majority of the baby boomers are feeling pretty good about their financial situation. And they’re probably the most optimistic of all generations based on our survey.
And frankly, that’s probably because they had more time to build that wealth and have thought about it. If they prepared properly, they’re starting to retire and good for them because they put their time in and they should take advantage of all the savings and make decisions they made over the time.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, a really good point. Again, my apologies for interrupting you when unintentional. Let me ask you, you talked about the power of a platform like Manulife, John Hancock, and also the power of the employer being a source of research and education.
How do you generate those aha moments? I mean, we have so many different tools now, or mediums, I’ll call them, from X to Instagram to TikTok to the web, your phone. How do you personalize the education?
How do you reach that individual in a different generation and get them, I don’t know, not excited about retirement, but get them thinking about this earlier, the sooner the better?
Wayne Park, Manulife John Hancock Retirement
I think you nailed it. One of the words you used is personalization and having all these different platforms, the data and the technology, frankly, using AI to make it personalized for that individual, I think that is as close to the secret sauce as possible. We think about the aha moments in a couple of different ways.
One is not the traditional way of here’s the plan and a thick booklet, right? You have to create an experience that they can relate to, especially when you talk about Gen Zs, where it feels so far away. And we’re competing with the TikToks, as you mentioned, of the world where it’s so entertaining and engaging.
And if we can’t deliver content that way, I think we will miss out. So certainly, one, create an experience that competes and think about competing with the likes of TikToks and other mediums. Two, make it relevant, because if it’s not personalized to you, I’m sure you’re on different social media platforms.
And I can’t tell you if I thought about buying a new sneaker, the ads keep coming one after the other. So how do we make sure we can personalize, make it relevant for that individual, their situation they’re in with as much data that we have working with our employer sponsors? And then the third piece, I think, multimedia, you mentioned, but videos matter, right?
Most of the social media platforms, the reason they’re so proliferating is that it’s the most engaging platform. So how do we make videos matter? And we’ve used a provider to leverage AI to personalize using the data that we have, deliver a short snippet content that’s video and personalized to that individual audience of one.
And we’ve seen some gains in that manner. So create an experience, personalize it. And if you can, deliver it via video so that it’s in the content that they really like to receive and consume.
Jeffrey Snyder, Broadcast Retirement Network
Wayne, we’re going to have to leave it there. So great to see you. Great research.
Thanks for joining us. And we look forward to having you back on the program again very soon.
Wayne Park, Manulife John Hancock Retirement
Appreciate having me. Thank you, Jeff.
Jeffrey Snyder, Broadcast Retirement Network
That wraps up this morning’s episode. But guess what? We’re back again tomorrow for another edition.
Until then, I’m Jeff Snyder. Stay safe, keep on saving, and don’t forget, roll with the changes.