Financial services representatives are well versed in the challenges faced by baby boomers as they plan for retirement: rising health care costs, the erosion of traditional safety nets, and an uncertain economic environment are just a few potential roadblocks to clients’ future financial security. These factors, combined with age, gender, income, and lifestyle, all play an integral role in how financial services representatives work with clients to plan for a confident and secure retirement.
However, some financial services representatives might be overlooking a critical factor in their clients’ financial security – the impact that family structure has on individuals’ outlook and plans for living in retirement.
The MetLife Mature Market Institute Family Matters Study recently uncovered how individuals from three common family structures approach retirement planning and the challenges that each group believes they face: single women, with or without children, who are widowed, divorced, or never married; blended families, consisting of two parents who have at least one child from a previous relationship; and traditional families, which include two parents and children from their current relationship.
The study found that individuals from each family structure are seeking retirement advice and planning assistance to address the unique situations they face. For financial services representatives, understanding how these dynamics impact client needs regarding advice and products can go a long way in marketing to clients.
Of the three family structures studied, single women report the most concerns about planning for retirement. According to the study, 65 percent do not have a good idea of how much money they will need to cover basic expenses once they retire, and only 15 percent report that they are following a solid retirement plan. Fewer than half own a 401(k) plan, and only 38 percent have a clear idea of what they hope to experience in retirement.
Because they don’t have the buffer of income from a spouse, single women are most likely to feel that they’re on their own when it comes to covering expenses, supporting children and other dependents, and socking away savings for retirement. However, because single women don’t have the cushion of another income, they’re perhaps most in need of advice and products that can help them secure income in retirement. Products such as long term care insurance, longevity insurance, disability insurance, and employer-sponsored defined contribution plans can be effectively targeted to women who are concerned about providing their own safety net in retirement.
In today’s society, the term “family” applies to an ever-increasing variety of arrangements. As demographics shift, stepfamilies become more common, and steadily more Americans may find themselves in a “Brady Bunch” family scenario.