Ah, the heady days of 2007. Seems like just yesterday the Dow reached 14,000 and the words sub-prime only applied to crappy meat. That year, we teamed with Matt Greenwald and Associates to survey baby boomers about their spending and saving habits. The results were concerning, but with the economy the way it was, they had time to adjust.
Fast forward to the present, and the focus has sharpened--to say the least. Call it a view from the top and the bottom (hopefully). If we were concerned in 2007, we're triply so now. We thought it illuminating to take another look not only at their spending and saving habits, but what they think of you, the advisor, and their prospects for a successful retirement.
How are baby boomers coping in a number of areas key to financial independence and a fulfilling retirement? Where have they cut back? What moves are they making to ensure their retirement dreams won't disappear with their investment returns? How does their confidence rate for the future? Most importantly, how can financial advisors best help them?
We answer these questions, and more.
1 | Has the recent rebound in equity markets reassured you of the viability of your long term financial and retirement plan?
It's hardly encouraging that "All is lost" rings in higher than "Yes, I am reassured." Or that well over 63 percent of respondents fall in the lower half of the emotional spectrum. But with fears of a 2010 fall-off still at the forefront, it's not at all surprising. We'll take a glass-is-half-full approach and consider the possibility that they're not falling for short-term fluctuations in the market, and are looking for a sustained upward trend before regaining confidence. If so, the lessons on the dangers of performance chasing and emotional investing might actually be getting through.
2 | Do you view and act on information you receive from cable news?
Speaking of performance chasing and emotional investing, we wanted to get a handle on how often respondents were engaging in just that. In other words, just how difficult is Jim Cramer making your job? They say TV courtroom dramas are making it more difficult for lawyers to do theirs. Are the CNBC stocks jocks having the same detrimental effects on the advisor/client relationship? The 50 percent tally that does, in fact, sometimes act on what they hear is concerning, even if the "occasionally" means they're somewhat discerning.
3 | How often are you eating out?
We asked this question to get an idea of boomer discretionary spending, a sector which for a long time was in the cellar. We were surprised to find it only dropped 6 percent from 2007's survey. But it tracks with an answer we received to another question we asked that same year; more than half told us they are not financially disciplined. The trend continues this year, but we are at least heartened to see 31 percent said only once a month (let's hope it's at Applebee's) and 10 percent said not at all.