Baby Boomers’ retirement will be nothing like their parents and this could be said of nearly every generation. However, Boomers today face fundamental challenges to the American retirement paradigm that has held firm for the past 75 years.

Most consumer research on retirement focuses either on retirement aspirations of the more affluent, the sliver of Americans that control most of the country’s assets, or on the dearth of retirement savings across the general population. The Center for a Secure Retirement’s March 2011 study of middle-income Boomers, those earning $25,000 to $75,000 annually, reveals how conceptions of one’s retirement age, activities and legacy are fundamentally changing.

The Silent Generation, those born between 1925 and 1945, grew up in the shadows of the Great Depression and World War II. The worldview of many in this age group focused on hard-work, frugality, savings, and protecting one’s family. In 1935, the Social Security Act established funding and an expectation of retirement beginning at age 65.

At that time, less than half of the population reached this age. Retirement was viewed as an opportunity to travel and spend time with one’s children and grandchildren, often passing along an oral (rather than monetary) legacy.

Baby Boomers’ childhood memories are less likely about economic woe and war than about prosperity and growth. Advancements in education, healthcare, technology, and infrastructure created a world of abundance for boomers.

The increase in life expectancy has been profound. A Boomer born in 1960 is likely to live 10 years longer (to age 70) than a parent born in 1930. What had been an uncertain retirement dream has become a retirement privilege of five or more years. And this trend is expected to continue. Britain’s department of Work and Pensions notes that baby girls born in 2011 have a one in three chance of reaching age 100.

Demographic Cross-Currents

The clash among these demographic trends and out-dated retirement expectations results in three challenges for Boomers and the financial professionals that advise them. First, a longer life does not necessarily mean a healthier one. Second, Boomers must re-evaluate the balance between work and retirement. Finally, for most middle-income Boomers, leaving a legacy must be redefined beyond solely monetary measures.

While Boomers are living longer, they are not living healthier. Rates of heart disease, cancer, stroke, diabetes, hypertension and obesity have all increased between 2000 and 2009 for individuals age 45 to 64. Today, 5.4 million Americans are living with Alzheimer’s disease. By 2050, as many as 16 million Americans will have the disease.

In light of these trends, the Center for a Secure Retirement study found that 81% of middle-income Boomers expect that their retirement will be a time for staying physically fit and healthy living, which corresponds to the top worry of 80% of Boomers— uncovered healthcare expenses.

Health insurance continues to shift more and more responsibility on the individual. Keeping Medicare supplement and long-term care insurance affordable does not require continued advances in extending life, but a focus on living healthier. Taking personal responsibility for one’s health is a pre-requisite for a happy, healthy and long retirement.

Affluent Americans may be able to earn and save enough in 40 years to pay for 20 years of retirement, but most middle-income Americans probably never will. With the great recession, Baby Boomers began to face this stark reality, as many took significant losses within their retirement savings. A world of abundance, a high standard-of-living, and rising real estate values came crashing down, particularly for those leveraging high debt.

At the same time, individuals are asked to shoulder more responsibility.

Social Security, first a mainstay for retirement, has now become a tattered safety net. Most employers’ pension plans have been replaced by 401(k)s. Baby Boomers are now realizing that retirement at age 65 is unlikely. The Center for a Secure Retirement found that three out of four (73%) middle-income Americans age 47 to 65 say that their financial situation, not age, is now the key indicator for when to retire. And 6 in 10 (60%) say what they envy most about their parents’ retirement is the financial security of having a pension and guaranteed income.

Leaving a legacy carries many different meanings for today’s Baby Boomers: inheritance, charitable donations, memories or shared experiences. But for early Boomers, it carries an entirely different meaning—not being a burden to their children.

They’re concerned about who will cover their funeral and burial expenses? What will become of the family home? How will I be cared for if my adult children move to a new city or still have their own children at home?

Some pioneers within the generation are finding second and third careers, leveraging decades of experience to supplement income and leave a legacy through volunteerism and teaching. Leaving a legacy does not need to be a large lump-sum financial gift. The Center for a Secure Retirement found that more than half of middle-income Boomers (55%) have saved less than $100,000 for retirement. One-fifth (19%) have saved less than $10,000.

Helpful Tips for those in the Middle

While retirement dreams of previous generations may hold true for the most affluent, what advice can you offer to middle-income clients?

First, living healthy can make working longer more feasible, more enjoyable and reduce future healthcare expenses. And before catastrophic health problems arise, there are a wide variety of insurance products that can address those risks.

Second, financial models focused on maximizing yield to reach a certain number, or nest egg, should be replaced with a model that delivers income for life. Many advisors focus countless hours on assessing investment risk and return, but spend little time on one of the most important variables in a customer’s retirement plan— one’s lifespan. Several insurance products can effectively address longevity risk— the risk of outliving one’s money.

Finally, helping clients set realistic goals for retirement and leaving a legacy can ease the worries that many of the first Boomers to retire hold.

Chris Campbell is vice president of strategic marketing and business development at Bankers Life and Casualty Company.