As individuals approach the traditional retirement age, their retirement experiences are becoming increasingly diverse, reflecting a broader shift in how retirement is perceived and planned.
It’s halfway through 2025, and over 2 million Americans have already celebrated their 65th birthday, with more than 4.1 million expected to reach this milestone by the end of the year.1 This marks a significant demographic shift, as the aging population continues to grow rapidly. However, as individuals approach the traditional retirement age, their retirement experiences are becoming increasingly diverse, reflecting a broader shift in how retirement is perceived and planned.
The Shifting Landscape of Retirement
The traditional image of retirement, a clear break from work at a set age, is rapidly evolving. For example, the 2025 Retirement Confidence Survey conducted by the Employee Benefit Research Institute (EBRI) reveals a fascinating disconnect between retirement expectations and reality. While many workers plan to extend their careers beyond age 70, a surprising 60% of retirees report leaving the workforce earlier than age 65, with a median retirement age of 62.2 If we apply that to the peak 65 generation, it means that approximately 2.46 million of the 4.1 million individuals reaching age 65 this year may already be retired.
Furthermore, while over 40% of early retirees indicate that they retired because they could afford to, nearly 70% cite reasons beyond their control for their early exit from the workforce.2 This shift underscores the need for a more adaptable and resilient approach to retirement planning, one that can accommodate the diverse needs and challenges faced by an aging population.
In this new paradigm, retirement planning must move beyond the singular focus on accumulating wealth by a certain age. It must also incorporate strategies for ensuring income stability and flexibility in the face of unforeseen life events and the evolving nature of retirement itself.
The Importance of Personalization
This evolving landscape demands greater personalization in retirement planning. Consider the 4.1 million individuals turning 65 in 2025. This group represents a wide spectrum of retirees with varying needs and aspirations. For some, the path to retirement is traditional, supported by pension plans that offer a stable and predictable financial future. In contrast, others rely solely on 401(k) savings, requiring careful management of multiple risks to ensure their funds last while addressing unique personal circumstances. Retirees have diverse savings levels: some have substantial funds, while others risk depleting their resources due to insufficient savings.
Personalized retirement planning involves tailoring strategies to meet the specific needs and goals of each retiree. This includes assessing financial readiness, understanding personal circumstances, and developing a plan that provides both stability and flexibility. It also requires a focus on education and guidance, helping individuals understand their options and make informed decisions about their retirement journey.
Access to professional advice, whether through a financial advisor or a managed account service, offers personalization that extends beyond just retirement age. It encompasses a deeper understanding of each retiree's financial landscape, lifestyle preferences, and long-term goals.
The Power of Predictable Income
In the realm of personalized planning, products that provide income stability, like annuities, are becoming increasingly significant in the defined contribution (DC) market. Innovative solutions are being developed specifically for integration within DC plans, making them more accessible to American workers. Annuities provide retirees with a reliable income stream, helping to ensure financial security in an ever-changing retirement landscape where many individuals are responsible for funding their own retirements.
Additionally, modern annuities, like the Allianz Lifetime Income+® Annuity, offer more flexibility more traditional annuity structures that require annuitization. Instead, participants can access the cash value of their annuity after starting lifetime withdrawals without any withdrawal fees, although a Market Value Adjustment might apply. They can also decide when and how to take income, starting at age 60 or older.
This flexibility is key in today's evolving retirement landscape, where personal circumstances significantly impact retirement security. As retirees encounter diverse financial situations, health considerations, and lifestyle preferences, the reassurance of a guaranteed income, along with the ability to adapt income strategies to personal needs, supports a holistic approach to retirement income security.
As the aging population grows, retirement is undergoing a major transformation. The traditional idea of retirement is being redefined, driven by diverse experiences and changing expectations. Personalized retirement planning that includes strategies for stable income and flexibility can meet the needs of today's retirees and future generations.
By embracing this new paradigm, we can ensure that retirees are equipped to navigate the complexities of retirement income planning and feel confidence in a guaranteed stream of income that cannot be outlived.
To learn more about how strategies that emphasize both personalization and protection can help improve participant outcomes, explore the recently refreshed white paper (PDF) from Allianz Life Insurance Company of North America. For further insights and guidance, contact our team.
