Reframing retirement: Happiness and financial planning for your future self

By: Dylan Tyson
President, Retirement Strategies and Head of Global Retirement Center of Excellence

This isn't your grandparents' retirement. Gone are the antiquated visions of retirement happiness equating to a life of leisure filled with beaches and sailing. Putting aside whether those visions were ever, in fact, reality for most, we know that today's desired outcomes in retirement go far beyond mere relaxation.

Around the world, as people are living longer and traditional notions of retirement evolve, the role of financial planning is more important than ever. But how can we plan for the road ahead when our future selves are largely strangers to us? That's why better understanding the real drivers of happiness and how they affect our future needs, wants and wishes in retirement are great places to start.

Understanding happiness
At this year's Aspen Ideas Festival, I got to sit down with Robert Waldinger, director of the Harvard Study of Adult Development and co-author of The Good Life, Lessons from the World's Longest Scientific Study of Happiness. Dr. Waldinger's work, along with co-director of the Harvard study Marc Schulz, demonstrates that proactively cultivating close relationships and social connections significantly enhances our well-being as we age.

Ultimately, research shows that a fulfilling retirement is not defined by the size of one's savings, but rather by the legacy of our life's work and the depth of personal connections nurtured along the way. You can check out our Aspen Ideas Festival mainstage discussion on Living Better, Longer here.

Getting to know 'Future You'
Through that lens, here at Prudential, we're reframing how the industry and our customers are thinking about retirement - by introducing people to their future selves. Using artificial intelligence, it's now possible to create photos and anecdotes of what you may look and feel like in retirement, using things like our Flash Forward™ experience.

Flash Forward™, a multimodal AI tool that combines image generation, hyper-personalized stories and voiceover narratives, asks people a few simple questions, captures their image and then shows them how they'll look aged 75+ doing what they've always dreamed of in retirement.

And taking this tech-forward approach even further, we're collaborating with UCLA professor Hal Hershfield and his "Future You" technology partnership with the MIT Media Lab to enable people to have AI-driven chats with their future selves. Our partnership includes a research project with Dr. Hershfield to see what insights those conversations can provide about people's true wants and perceptions of retirement.

Why it matters: Better inputs lead to better outcomes
By getting to know our future selves and our future needs and wants, retirement planning becomes not just a financial exercise, but a comprehensive strategy for achieving lifelong happiness.

Building a more holistic approach to retirement planning is crucial to address the global trend of increasing longevity, and meet the significant opportunity to assist individuals in saving, planning, and protecting their finances for extended retirements.

Meeting the global retirement need
Increasingly around the world, this need is underscored by the shift from traditional workplace defined benefit pensions to defined contribution plans such as 401(k)s. These plans, which initially were designed to complement the guaranteed income from pensions and Social Security, many times now stand alone - placing considerable burden and risk on individuals often ill-equipped to fully manage their retirement.

As a result, the guidance of financial professionals becomes even more invaluable, whether integrated into workplace offerings or provided for retail solutions such as individual retirement accounts (IRAs). Solutions that provide protected investment accumulation and lifetime income benefits through products like cash-value life insurance and new insurance overlays for separately managed accounts can empower customers and their financial advisors to effectively navigate the complexities of modern retirement planning.

At Prudential, this means bringing together the full power of our global enterprise to maximize impact in our current markets and deliver retirement security in new ways and in new markets. Through purposeful, aligned sharing of expertise, best practices, insights and thought leadership across business units and geographies, we will mobilize our insurance and asset management capabilities to help more people protect their life's work.

While the outdated ideas of never-ending vacation can sound appealing on the surface, research shows that a fulfilling retirement more accurately takes into account deeper needs and wants. And because each retirement plan will be as unique as each individual's relationships and desired outcomes in retirement, it is imperative that we get to know our future selves.

Prudential is committed to empowering more individuals with the tools and insights necessary to craft a retirement strategy that helps them live better lives, longer. By leveraging our global expertise and resources, we aim to realize our company's vision to be a global leader in expanding access to investing, insurance, and retirement security.

The Prudential Insurance Company of America, Newark, NJ, and its affiliates.