What will retirement look like in the future and what does it mean for the future of work? How can we ensure that current workers as well as future generations, like the most recently born members of “Generation Beta,” are prepared for a more flexible and dynamic retirement?These are critical questions as the global retirement landscape undergoes a profound transformation. Driven by demographic shifts, increasing longevity, evolving capital markets, and changing workforce dynamics, there is a growing demand for investment products and strategies that help ensure people’s retirement nest eggs last a longer lifetime.Key trends shaping the future of work and retirement include:
- An aging population across the world.
- Longer lifespans, which are increasing the need for secure income streams.
- Market volatility and economic uncertainty, which increase the need for smart retirement savings and investment strategies.
- The rise of the gig economy and the expectation of multiple career paths, which are reshaping how people think about work and retirement.
Taking a Step Back (in Time)
Over the past decade, the conversation around retirement has evolved significantly. Initially, the focus largely centered around how much money people need to retire and questions like, “What’s my number?”In recent years, the dialogue has shifted to important questions that focus on retirement in context of an individual’s work-life and their “future self.” This shift is driven by:
- The move from employer-sponsored pensions (defined benefit or “DB” plans) to individual 401(k)s (and other defined contribution or “DC” plans), which has placed more responsibility and risk on individuals. This creates an enormous opportunity for employers and financial advisors to help them develop sound investment strategies that protect financial outcomes.
- The rise of artificial intelligence tools that help people better visualize their future selves and identify future needs, wants, and wishes in retirement.
- The development of more personalized retirement planning and solutions, reflecting the changing needs and changing mindset of the workforce.
The Future Is Now
According to recent Prudential research, “Generation Beta: Redefining Life, Longevity, and Retirement,” people believe that the work lives of those born January 2025 and later will look vastly different in the future.
- Flexible retirement: 67% of people believe that retirement can happen at different stages throughout life, reflecting a growing trend toward “mini-retirements” — the concept of people having two or three different careers throughout their lives, taking short breaks in between, then pivoting to new opportunities.
- Multiple careers: 80% expect Generation Beta to pursue more than three distinct career paths over their lifetime.
- New jobs: 86% believe Generation Beta will have jobs that haven’t been invented yet.
- Personalized needs: 82% predict that Generation Beta will expect and need much more adaptable and personalized retirement products.
- Financial stress: Inflation, market volatility, rising healthcare costs, and potential economic downturns add to the financial worries for pre-retirees and retirees.
Big, Exciting, and Provocative Ideas
The future of retirement is being shaped by several big ideas to help connect the future with the present. We need a comprehensive approach to address the evolving needs of the workforce, including new approaches to best practice retirement systems that will ensure future workers are prepared for a secure and fulfilling retirement:
- Hybrid workplace retirement solutions: One of the most promising new approaches is the development of products that combine the best features of yesterday’s defined benefit pension plans with today’s defined contribution plans. These include Insurance Overlay solutions, like those being developed in the individual retirement account (IRA) space that bring insurance-based protected lifetime income strategies directly to managed accounts without the need to move assets.
- Financial literacy and tech-forward experiences: Leveraging technology to provide clear, simple, and accessible digital tools that enhance financial education and help workers make informed decisions about their retirement.
- Automating in-plan income: Making the process of converting retirement savings into steady streams of income simpler and easier.
- Collaborative efforts: Working together, employers, legislators, and financial institutions can create a sustainable retirement system. This includes policies that improve financial literacy and help workers understand how their investment choices will impact their future retirement income.
The retirement landscape is at a critical juncture, and it’s created a global opportunity — and responsibility — for us all.Evolving workplace retirement plans, increasing longevity, and changing workforce dynamics create even more demand for secure investment products and lifetime income solutions.Through hybrid approaches, innovative financial products, and a focus on financial education, we can ensure that the future of work includes the future-ready resources that people need to live better lives, longer.
About the Author
Dylan Tyson, CFA
President, Retirement Strategies and head of the Global Retirement Center of Excellence at Prudential Financial, Inc.
Dylan Tyson is president of the Retirement Strategies business at Prudential, which provides industry-leading solutions for growth and protection to more than two million individual and institutional customers.
Tyson joined Prudential in 1995 and has held advancing leadership roles in the U.S. and internationally, including as president and CEO of Prudential of Taiwan and chief strategy officer for Prudential Life Insurance of Korea. Previously, within Prudential’s legacy retirement businesses, he served as senior vice president and head of Pension Risk Transfer, leading the breakthrough General Motors pension risk transfer transaction, among others.
Throughout his career, he developed broad management and business development experience with guaranteed products, with overall accountability for Prudential’s Payout Annuities, Structured Settlement, and Institutional Stable Value product lines. Tyson received his bachelor’s degree with high honors from Stanford University, and an MBA from the Anderson School at UCLA. He is a CFA® Charterholder.
About this Series
This is part of a series called “Back to the ‘Future of Work’: Revisiting the Past and Shaping the Future,” curated by the Aspen Institute Future of Work Initiative. For this series, we gather insights from labor, business, academia, philanthropy, and think tanks to take stock of the past decade and attempt to divine what the next one has in store. As the future is yet unwritten, let’s figure out what it takes to build a better future of work.
About the Future of Work Initiative
seeks to build and disseminate knowledge rooted in workers’ experiences. We aim to advance policy ideas at the local, state, and federal level, backed by evidence. And we strive to build community and activate leaders to carry these conversations forward across sectors and around the globe. This initiative was founded in 2015. Recognizing the need for a comprehensive approach to building a more inclusive economy, the Future of Work Initiative integrated with the Aspen Institute Economic Opportunities Program in 2021.