Editor’s note: The following executive summary of the survey was created by The Boomer Project, a Richmond, Va.-based marketing research and consulting company focusing on baby boomers and marketing. Started in 2003 by Matt Thornhill, The Boomer Project helps marketers and their advertising agencies better understand the mindset of boomers. It also helps to develop strategies and tactics for reaching this audience with messages they’ll respond to. For more information about The Boomer Project, visit www.boomerproject.com.

The results of this study, taken among 326 adults over the age of 60 who have retired from their primary careers, provides interesting and actionable insight to Senior Market Advisor and its readers. Above all, the survey finds that these folks are doing pretty well, by their own assessment:

  • More than 70 percent give themselves a score of 7 or higher on a personal finance wellness scale of 1 to 10.
  • Three-quarters say they are doing as well or better financially than they expected they would at this stage of life.
  • The percentage of adults surveyed who describe themselves as being in less positive or even poor personal financial condition is actually quite small.

Financial affairs are important to older Americans. But the findings of this study tell us that the majority of adults over 60 who have retired from their primary careers do not look upon money as an obsession, but rather as a means for enjoying life:

  • Two-thirds of study participants may think about money from time to time. But they do not worry about it. Instead, they are at a stage of life when they plan to think of nothing more pressing than enjoying themselves and using their time as they wish.
  • Just over half of adults over 60 say they are either not very or not at all concerned about their retirement finances.

Planning makes it easy

Herein is the big story of this study, namely the distinction between those who worry about money or are concerned about their retirement finances and those who are not. This distinction is particularly important because it is an area where financial advisors who work with older adults can play an important and much appreciated role.

Key findings of this study include the following:

  • Those who have a plan for managing their retirement finances are less concerned about their retirement finances and are more optimistic about their future financial condition.
  • Sixty-one percent of those who have a personal financial plan are not concerned about their retirement finances while only 51 percent of those without a plan are not concerned. Half of those with a plan say they expect to be in better financial condition in five years while only 28 percent of respondents without a plan say they expect to be better off in five years.
  • There is greater financial optimism among those who said they are doing well financially than among those who gave their personal financial conditions less positive ratings.
  • Fifty-six percent of respondents who said they were in very good financial condition expect their financial condition to improve, while only 24 percent of those who were less positive about their condition expect it to improve.

It should not come as a great surprise that people who consider themselves to be in good financial condition tend to be more optimistic about the future than those whose personal finances are not as robust. But in saying this, we do not wish to give the impression that the financial aspects of aging in America are not completely anxiety-free. Indeed, when asked to name their highest current financial priority, more study participants answered “not outliving my money” than mentioned any other single financial goal.

Active retirees

Retirement itself is an arguably different proposition for today’s senior than it was for their parents:

  • The traditional retirement age of 65 is not the norm for our study participants. In fact, very few are making it that far before retiring. The most frequently mentioned retirement age among our study participants in this study was age 62, followed by ages 65, 55, 58, and 60.
  • Although they are retired from their primary careers, roughly 1 in 5 retirees continue to be engaged in some form of compensated employment. Most said they want to do this. A few, however, said work continues to be an economic necessity.
  • Not surprisingly, given the skew towards younger retirements, a fifth of our study participants have already tapped or anticipate tapping into their retirement assets before they turn 65. Curiously, though, more than 4 in 10 said they have no idea when they will begin to tap into their retirement assets.

Study participants, however, showed little overall interest in a number of specific financial services and products. Furthermore, most are satisfied with the current offering of financial products. Instead, their feedback tells us that they are more interested in performance than in product. Among a list of 22 financial products and services, two of the three most interesting to our study participants were not products, but rather outcomes:

  • Investing for income.
  • Investing for growth.

Study participants said they are familiar with a number of financial products and services. However, they are not as familiar with newer products such as life settlements, 529 college plans, Roth IRAs or investment potential collectibles such as art and antiques. This lack of familiarity understandably results in a lack of interest in these categories. Study participants showed the greatest interest in traditional products — savings accounts, stocks and bonds, CDs — and less in real estate, life insurance, annuities and reverse mortgages.

Who are the best prospects for senior financial advisors? This study suggests two audiences: 1) mature investors who remain interested in active and aggressive asset management and 2) those who are concerned about their retirement finances.

Mature investors are likely to already be known by senior financial advisors because they are the kinds of people most likely to already have outside financial counsel. Those who are concerned about their retirement finances, on the other hand, may be a different and, in some ways, more challenging audience to serve:

  • They have income under $50,000.
  • They have net worth, exclusive of their homes, of less than $100,000.
  • They believe their personal financial conditions are worsening, will continue to worsen this year, and will be worse still five years from now.
  • They worry a lot about money.
  • They are more concerned than others about having money to pay bills and having adequate financial resources to cover their health care needs or, indeed, even being able to afford health care.
  • They are more likely than others to have already spoken to a professional advisor of some kind about their personal finances. But they are less likely than others to have a financial plan for their retirement.
  • They are more likely than others to say they would be interested in new financial products. But they are also more risk-averse than those who are not concerned about their retirement finances, suggesting that their desire for something new is merely a reflection of a wish for something that can give them greater hope.
  • They are slightly less likely than others to have life insurance policies.
  • Compared to others, they are more comfortable talking to a banker or an independent financial planner, and less comfortable than others interacting with stock brokers and financial planners with large firms.

Asking for help

In summary, the findings of this study lead us to believe that senior market financial advisors’ best prospects will be experienced investors with adequate assets to work with and a predisposition to support a mix of investments with moderate-to-aggressive levels of risk.

It is difficult to draw too many conclusions from this study about the less affluent, alternate market segment. Senior market financial advisors may find it particularly challenging to serve those whose limited resources and discomfort with risk make it difficult to achieve significant income and growth goals at this stage in their life.

However, this audience may be very much interested in traditional products and services that help maximize income while preserving assets. And by merely engaging in a more determined course of planning, a great many less affluent retirees may be given more confidence in and greater peace of mind about their personal financial conditions.

Methodology

Senior Market Advisor’s 2007 Senior Survey was conducted by The Boomer Project, a Richmond, Va.-based research and consulting company, based on a standardized questionnaire provided by Senior Market Advisor. Data collection for this survey took place between April 18 and April 25, 2007. The online survey was completed by 326 adults age 60 and older who are retired from their primary career and have a net worth, exclusive of their home, of $35,000 or more. All surveys are subject to a standard error, the so-called “plus or minus” factor that is the result of conducting a survey among a random sample instead of the total universe. The standard error for a sample of 326 at the 95 percent confidence level is plus or minus 5.5 percentage points.