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Retirement Planning > Saving for Retirement

Opportunity’s Knocking

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National Underwriter Life & Health editor-in-chief Bill Coffin recently discussed findings from a Towers Watson survey that found that more than half of workers would be willing to sacrifice some take-home pay in exchange for more retirement benefits. This should be seen as a tremendous opportunity for advisors, who can help individuals realize that they have the ability to create their own retirement “benefits” by dedicating a portion of their pay toward mailbox money. That is—by utilizing a lifetime income strategy as part of their retirement plan. 

Additional research by the Insured Retirement Institute (IRI) shows that more than half of Americans have not discussed their retirement needs with a financial advisor. Again, this should be seen an opportunity. After all, IRI also found that 90 percent of boomers who worked with financial advisors believe that they are doing a good job of preparing for retirement. In simplest terms, these research studies tell a compelling story: workers want and value security, many have not discussed their needs with an advisor, but those that have are feeling good about it. Opportunity’s knocking. The next step is to identify the demographic segments where these opportunities are surfacing and to understand the issues facing each group.


IRI defines the boomer generation as the estimated 79 million individuals born between 1946 and 1964. The early boomers have already reached retirement age, but the recent recession appears to have had a noticeable effect on their perception of retirement savings and income. During the recession, nearly a third stopped contributing to a 401(k) plan or another retirement account, nearly a quarter postponed their plans to retire, and 20 percent prematurely withdrew funds from a retirement account or another savings vehicle. This so-called “leakage” of retirement assets is particularly disconcerting since it will leave them with fewer assets for retirement. It should be no surprise then that more than 40 percent of boomers view Social Security as a major source of retirement income. Likewise, it should not be a surprise that this generation, having weathered the storm of the financial crisis and recent recession so close to retirement age, appears to be increasingly risk averse. Yet, boomers who own annuities have a higher level of confidence in retirement expectation, with nine out of 10 believing they are doing a good job preparing financially for retirement. 

Generation X

IRI defines this market segment as the 70 million Americans born between 1965 and 1981. This group tends to be well educated, work in professional occupations, and has a large portion of homeowners—particularly among married couples. But only about a third of them have ever consulted a financial advisor and just 41 percent have tried to determine how much they will need to save for retirement. Moreover, 45 percent of GenXers assess their knowledge of investing as low to none. At the same time, according to the Employee Benefits Research Institute, only 15 percent of this generation will be covered by a defined benefit pension. An IRI research report found that more than half of GenXers expect their 401(k) plans to provide a major source of retirement income. But among those who have saved, half of them have amassed less than $100,000. Considering such savings levels, it explains why only a third are confident of having enough money to live comfortably during retirement, cover their medical expenses and pay for their children’s higher education.


While both boomers and GenXers will experience longer life spans in retirement than earlier generations, this will be of particular importance for the female subgroups within these broader markets. Females tend to live three to four years longer than their male counterparts, but generally receive considerably smaller payments from Social Security and from employer-sponsored pension plans. This requires women to self-fund a greater portion of their retirement. When it comes to retirement planning, approximately 95 percent contribute to the financial decision-making process in their households, but half say they need help in some areas. And 59 percent of women are comfortable with having a financial advisor take the lead in retirement planning, research and analysis. While women are more inclined than their male counterparts to work with a financial advisor, more than half of all boomers have not consulted with a financial advisor.

Moving forward

Now that potential markets and submarkets have been identified, advisors will need to understand the expectations of these segments and how to engage with clients to meet those expectations. At IRI’s 2012 Marketing Summit, we’ll offer insights from Age Wave President and CEO Ken Dychtwald on how the recession has changed retirement expectations for these groups. We’ll also hear from Joe Pine, co-author of “The Experience Economy,” on how to connect with these customers by creating a memorable client experience.

The financial crisis and the recession have changed workers’ expectations. Workers are valuing their benefits more and are willing to pay for financial security. The opportunities are there. Learn about the expectations of these groups and how to tailor your message to meet their lifetime income needs. Opportunity’s knocking. How will you answer?


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