Boomers Are Doing U-Turns On Aging, Retirement
Over the past four years, insurance and financial services marketers have been quietly dropping boomer lingo from materials they aim at the baby boomer market, or those born between 1946 and 1964.
Instead of saying, for instance, “retirement planning for boomers,” they use nongenerational terms like life stage, life cycle and wealth planning.
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The reason? Boomers, especially older boomers born from 1946 to 1954, have increasingly been linked, in everyday parlance, with seniors, elders, mature people, and the gray-haired set–and boomers are said to not like that. Some boomers dont mind being called “prime of lifers,” says Jeff Sadler, a co-founder of the Center of Senior Studies, but they shun references to aging.
The drop-off in boomer nomenclature has been accompanied by a reduction in boomer marketing units and boomer specialists. The shift has been so pronounced as to make some observers wonder whether the financial services industry is actually abandoning this market.
To find out, National Underwriter went to demographers who track this age group and the industries that serve it. Their thoughts appear in this article. The piece is part of NUs ongoing look at the pending financial plight of boomers and the financial industrys response to it.
The demographers say this: The financial industry has not abandoned the boomer generation. In fact, a few firms are actually targeting it, albeit by marketing to its needs rather than its age group moniker. But, they say, the individuals in this generation face crisis-sized financial issues as they move into retirement, and the industry is not doing enough to get ready to help them meet these needs.
The industry needs to address both younger and the older boomers, says Matthew Greenwald, president, Matthew Greenwald & Associates, Washington, D.C. He cites three reasons:
Together, boomers form a gigantic population, numbering 77 million. (“The number used to be 76 million,” he says, “but immigration trends have pushed that up to 77 million.”) In the 1990s, a lot of financial companies targeted the top 10%, or high-net-worth, part of this market, he says, but “the next 70%, or the middle market, represents a huge market opportunity.”
This age group is “reasonably affluent,” Greenwald says. Thats especially true of older members, he adds, but the younger members–born between 1955 and 1964–soon will become affluent, too, as their 401(k)s grow and as they come into inheritances. That means they will have need for financial advice and products.
Boomers will live longer than their parents, have fewer adult children to care for them in old age, and be unable to rely on traditional pensions to fund their retirement. These trends also suggest boomers face multiple financial issues the industry can meet, he says.
“Society needs to focus on these trends in the regulatory structure, benefits structure, financial outlook and financial products designed for this market,” Greenwald says.
Do it as politicians do, he suggests. “Focus on the issues and needs of the group, not on the age of the group. For instance, dont talk about boomers; instead, focus on accumulating money for retirement, drawing down income during retirement, living too long, managing money without earning it, and responsibilities to children and heirs.”
“Preparing for retirement is the number one issue for boomers today,” agrees Charles Hurst, director of research and database marketing for Age Wave Impact, Emeryville, Calif.
Unfortunately, he says, a lot of boomers, and the advisors who serve them, dont know how to deal with it.
In the 1990s, he explains, “boomers thought they could just keep on working to finance their advanced years, if necessary. Some were also counting on the transfer of wealth from inheritances.”
But the stock market downturn of the past two years has changed things, Hurst says. Boomer assets have shrunken, and so has boomers confidence in their ability to keep on working to make up for shortfalls. Now, he says, boomers are increasingly questioning whether they will have enough money to finance their retirement.
In a sense, that is a positive development, Hurst says, because “boomers are at least aware of some of the problems they may face in retirement.”