Retirement has changed. So why are planning strategies still the same?

Retirement — and what it means to each and every employee — is changing, and employers will need to re-strategize their current approach if they want to set workers up for success.

A study conducted by Franklin Templeton, a leading asset management company, found that 80% of employees think the traditional idea of retirement no longer aligns with most people’s expectations or experiences. At the same time, three quarters say that their future financial goals and plans look different today than they did five years ago.

“We’re trying to validate this idea that retirement in particular is being turned on its head,” says Jacquelyn Reardon, director of retirement & insurance marketing at Franklin Templeton. “The more traditional view of what retirement is supposed to look like for everyone — hitting a certain age and stopping work to go off and do some hobbies — most people now are saying no to.”

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The vast majority of respondents indicated that there is no single path to retirement today, and recognize that retirement has become a moving target that will likely continue to shift for every future generation.

This is in part due to financial wellness becoming more than just a buzzword for employees. The trend has gained significant traction in recent years, and in the process has redefined the current worker’s relationship with the end of work. Unlike their predecessors — who traditionally worked until the retirement-appropriate age of 65 — workers today have identified financial independence and financial freedom as their most important financial milestones, with 81% citing financial independence as more empowering than retirement.

But how does financial independence differ from retirement? According to Reardon, sometimes it means not retiring at all.

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“Maybe [employees] don't want to stop working,” she says. “Maybe they want to change jobs or start a new business or get involved in charities and philanthropy. So we're seeing this big shift away from retirement as this one-time event or milestone that everybody is working towards.”

Twenty-two percent of employees have less than $5,000 saved for retirement, according to a study by Northwestern Mutual. Consequently, three out of four workers want their workplace to provide more resources to help them with their overall financial wellbeing, the Franklin Templeton study found. Employees have shown more interest in long-term support than immediate monetary gains; most prefer a boosted 401(k) match to a raise.

“Employees value their financial wellness with the same priority that they do their mental and physical wellness,” Reardon says. “No longer are they just looking for resources or benefits to help their physical body or their mental state. Now they're looking for resources and benefits to help them with their financial state, too.”

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In order to meet the changing needs of their employee base, employers will need to adjust their current strategies and embrace personalization by becoming active participants in their workers’ retirement journey. Nearly three quarters of workers expect their financial management apps and programs to use what they know about them to suggest the most appropriate resources, the study found, 62% claiming that unless they are getting personalized recommendations, they feel like financial education isn't very helpful.

“Nothing is one size fits all,” Reardon says. “Employees are their own person and I have their own goals. This move towards personalization and the need for a more personalized approach is a benefit to everybody's financial wellbeing.”