NEW YORK--(BUSINESS WIRE)--A new Merrill Lynch study finds that as the baby boomer generation retires en masse to enjoy newfound freedom of time and activities, an estimated 2.5 trillion hours1 of leisure time will be created among the 65+ population over the next two decades. For the first time in the U.S., more people are in the “time affluent” stage (age 65+) of their life than the “time constrained” stage (ages 35–44). This “leisure boom” will have an unprecedented impact on individual lifestyles, families, and leisure marketplaces.
Key findings include:
- The vast majority (92 percent) of retirees say retirement provides them greater freedom and flexibility to do what they want, regardless of how much money they have.
- Eighty-eight percent of retirees say retirement is a time for new beginnings.
- Ninety-five percent of retirees say they would prefer to have more enjoyable experiences rather than buy more things.
- Eighty-five percent say that retirement has allowed them more time to connect with family and friends.
- The retirement leisure travel economy is about to diversify and multiply, culminating into an estimated $4.6 trillion over the next 20 years2.
- Few retirees have thought through how they will spend their time in retirement, with 53 percent having hardly planned at all.
“Given the opportunities that come with more leisure time to be enjoyed in new and different ways, America is heading toward a happiness dividend,” said Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch. “The expansion and evolution of retirement leisure will create growing economy of new industries, products and services.”
Conducted in partnership with Age Wave, Leisure in Retirement: Beyond the Bucket List is an in-depth study that examines the priorities, hopes, dreams and challenges of the surging new world of leisure in retirement, and reveals how retirees are exploring and enjoying their newfound time affluence. The study also identifies four distinct stages of retirement leisure, each characterized by a unique blend of experiences, priorities, and connections. The stages begin with pre-retirees winding down from work and looking toward retirement, continuing through early years of retirement and a period of liberation and embracing of greater freedoms, and ultimately finding contentment in later years.
A new outlook on leisure
While pre-retirees view free time as “precious” and “scarce,” 79 percent of retirees say they now have the amount of free time they have always desired – in addition to having more freedom, more fun, new beginnings and greater emotional well-being than at any other point in their lives. They have entered a new phase of life – one with time affluence where, on average, a retiree has 7.5 hours3 of free time per day.
- Fun is more fun in retirement: Retirement is the time of life when retirees say they have most fun, reporting it peaks between ages 65 and 74. They are also 10 times more likely to say retirement is more fun, enjoyable and pleasurable than when they were working.
- New opportunities: 67 percent of retirees say they prefer trying new experiences in their leisure time versus engaging in activities they have already done.
- Improved emotional well-being: The study found that emotional well-being peaks in retirement. Feelings of happiness, contentment, confidence, relaxation all soar, while anxiety decreases significantly.
“Of all the life stages, our study revealed that the pinnacle of freedom occurs between the ages of 61 and 75 when retirees enjoy the greatest balance of health, free time, fun and emotional well-being – what we call the ‘freedom zone.’ With longer more vital lives, retirees have the opportunity to use their newfound freedoms and flexibility for personally meaningful experiences,” said Ken Dychtwald, Ph.D., founder and CEO of Age Wave. “We hope these insights help Americans become more optimistic about retirement while inspiring them to plan ahead and use their later years to their fullest potential.”
The new social security: Strong relationships matter
According to study findings, people value their relationships in retirement more than at any other point in their lives.
- When it comes to leisure experiences, 61 percent of retirees say “who you’re with” is more important than “what you do.”
- Seventy-nine percent of respondents age 65+ say it is important to stay connected with friends, more than any other age group.
- Three-fourths of retirees say they want to share travel with kids and grandkids, while 60 percent prefer sharing leisure experiences with grandchildren over anyone else – including their own children.
- Three out of 10 retirees have paid for leisure activities for family or friends in the last 12 months.
Preparing for leisure in retirement
The study uncovered two types of leisure experiences to prepare for that are: “everyday leisure,” the activities people do on a regular basis, and the rarer “special occasion leisure,” the stand-out moments such as a vacation or milestone. Retirees want a balance of both and seek different elements from each. While they are primarily focused on staying healthy and relaxing in their everyday leisure, retirees are striving for peak experiences and adventure in their special occasion leisure.
Although 86 percent of retirees say it is easy for them to find inexpensive leisure activities to enjoy, retirees can do more to plan and save for leisure in retirement:
- Fifty-eight percent say they do not know how much money they will need to fund leisure activities.
- Two-thirds of retirees have not discussed and agreed with their spouse or partner how much money to spend on leisure in retirement.
- Seventy-seven percent of retirees who say retirement is more fun, enjoyable and pleasurable than pre-retirement also report feeling financially prepared at various wealth levels.
“While retirees dream and save for that trip of a lifetime, when they return, they are often left wondering ‘How will I spend the next 50 weeks of the year? How about the next 20 years of retirement?’” said Lorna Sabbia, head of Retirement and Personal Wealth Solutions for Bank of America Merrill Lynch. “Whether it is researching a volunteer organization or signing up for classes at a local college, our research shows that leisure in retirement can be more fulfilling when people take the time to plan and prepare.”
To download the “Leisure in Retirement: Beyond the Bucket List” study and interactive graphics, visit www.ml.com/retirementstudy. This report is the latest in a series of in-depth studies focusing on seven life priorities, including an initial benchmark study. To explore additional content and resources related to these seven life priorities, visit www.ml.com.
1 U.S. Census Bureau, 2015
2 U.S. Census Bureau, 2016
3 Bureau of Labor Statistics, 2015
Merrill Lynch Leisure Study Methodology
This research study, completed in January 2016, was conducted by Merrill Lynch in partnership with Age Wave and executed by TNS via an online data collection methodology. The sample is nationally representative of age, gender, ethnicity, income, and geography. The survey was conducted among a total of 3,712 adult respondents age 25+. Qualitative research — six focus groups among both pre-retirees and retirees, and interviews with national thought leaders on a variety of topics related to leisure — was also conducted prior to the quantitative research.
The results of this survey are provided for informational and educational purposes only. The opinions, assumptions, estimates and views expressed are as of the date of this press release, are subject to change, and do not necessarily reflect the opinions and views of Bank of America Corporation or any of its affiliates. The information does not constitute advice for making any investment decision or its tax consequences and is not intended as a recommendation, offer or solicitation for the purchase or sale of any investment product or service. Before acting on the information provided, you should consider suitability for your circumstances and, if necessary, seek professional advice.
Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult with your legal and/or tax advisors before making any financial decisions.
Age Wave is the nation’s foremost thought leader on population aging and its profound business, social, financial, health care, workforce, and cultural implications. Under the leadership of Founder/CEO Dr. Ken Dychtwald, Age Wave has developed a unique understanding of new generations of maturing consumers and workers and their expectations, attitudes, hopes, and fears regarding retirement. Since its inception in 1986, the firm has provided breakthrough research, compelling presentations, award-winning communications, education and training systems, and results-driven marketing and consulting initiatives to over half the Fortune 500. For more information, please visit www.agewave.com. (Age Wave is not affiliated with Bank of America Corporation.)
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