Those poorly financially prepared Boomers have a new benchmark for their collective lack of planning: Seniors 75 and over have a net worth nearly 20 percent higher than younger Boomers, aged 45 to 54.
The Insured Retirement Institute’s new report, “Retirement Planning and the Elder Market: Advisor Strategies to Understand and Work with Senior Clients,” explores the challenges advisors face in conveying pertinent information to older clients, a market segment that is growing in both number and net worth.
The report found the highest median net worth is among individuals between ages 55 and 64 while senior citizens, age 75 years and older, have a net worth almost 20 percent more than those in the 45-54 age group.
IRI research found that two-thirds of advisors report their clients have asked them about annuities and that Boomers identified guaranteed income and principal protection as the most important trait of a retirement investment.
As a result, the report suggests that during the retirement strategy discussion, advisors must do the right thing and be certain their elder clients understand all the options, features, benefits and costs of the annuity products under consideration.
The report also found that social and family issues take on a greater importance for older investors, often including a variety of aspects related to lifestyle changes in retirement and the participation of family members and others in the decision-making process.
“Advisors serving older clients should be prepared to meet their unique financial needs and create an investment plan that addresses the sometimes difficult lifestyle and family issues this population must often tackle,” said IRI President and CEO Cathy Weatherford.
“This report shows that many in the elder market are still in need of formal financial advice. It also found that advisors serving older clients are making efforts to increase their client interactions by following-up with written summaries and sending copies of all correspondence to a secondary addressee such as a family member. That is an important step in ensuring that these clients understand their investment goals and options.”
The report also found:
- The number of Americans between the ages of 55-59 grew 46% since 2000; the number in the 60-64 year-old segment grew 56% during the same period.
- There has been notable growth among the oldest Americans, a 30% increase in the number who have attained age 85 over the past decade.
- Boomers, defined as those who are between ages 60 and 65 in 2011, are in need of retirement income advice, 51% believe they will not have enough money on which to live comfortably through retirement, and two-thirds would like to leave an inheritance to their loved ones.
- Fewer than half (45%) of older Boomers have ever consulted a financial advisor.
- Only 58% have determined the amount of money they will need to save for retirement.