By Linda Koco
The financial marketplace is rearranging itself along demographic parameters–creating what may be called the “Retirement Industry” out of the whole cloth of the “Life and Financial Services Industry” that was the darling of the 1990s.
The sea change is everywhere, including your own financial shores. If it hasn’t splashed up on you, it will.
The key business of this industry is to offer concepts, products and solutions that support people living in retirement for 20, 30 or more years. Retirement income planning is a key component, as we have noted in this space many times. But so is planning for long term care, critical illness, business startups, late-in-life protection and investment needs, new living arrangements, and, yes, legacy/wealth transfer.
Familiar insurance concepts ride in the mix, as do securities and banking concepts, but the focus is still on creating a financial infrastructure for retirement living. This infrastructure is especially suited to people who retire with build-it-yourself assets like 401(k)s, IRAs, HSAs, Keoghs, self-paid health care and long term care plans, real estate, private savings and investments, and any other non-government-, non-company-supplied financial benefit/asset.
NU has covered the many sides of this trend for years, but now it seems the elements are functioning as an integrated whole, the Retirement Industry.
Ask the non-financial people in your community about this, and there is instant recognition. The police, the religious, the educational, the medical and LTC, the nonprofits–they all know about it and how the Retirement Industry impacts them. Even the sidewalk crews know–”these flat curbs make it easier for the retired folks to get around,” they say.
So it is that “retirement” is popping up throughout the financial supermarket.
For instance, in NU’s recent focus issue on life insurance–the mainstay of the Life and Financial Services industry, as you know–there was repeated mention of how life insurance fits into retirement planning. That’s by way of loans and withdrawals, acceleration riders, geriatric underwriting, no-lapse guarantees and more.
The “retirement-ward” shift shows up in the general media, too. Consider: MetLife Mature Market Institute found, in a 2003 report, that major media coverage on annuities increased by 30% overall from 2001 to 2003. That is a substantial change, given that, up to then, the general media had focused heavily on managing money, investing and wealth building but not on retirement income strategies.