The Baby Boomers Prepare for Retirement
The population of pre-retirees and retirees is projected to increase by 30 million by 2020, and to account for about half of the US population, compared to 44 percent in 2002.
In the next few decades, the baby boomer generationthose born between 1946 and 1964will retire. In the US, the baby boomers number seventy-six million and account for over 28 percent of the population. As they retire, their sheer numbers and wealth will have an enormous impact on the worlds rich countries. In a new report, , Celent examines the different facets of the baby boomer generation and the impact its retirement will have on the financial services industry.
The poverty rate among Americans over the age of 65 has plummeted, and those over 50 control four-fifths of the money invested in savings-and-loan associations and own two-thirds of all shares on the stock market. However, there are many for whom the future does not look rosy. With personal savings rates near all-time lows and slightly less than half of all workers participating in an employer-sponsored pension, and as defined benefit plans become increasingly rare, many retirees are unlikely to sustain their pre-retirement standard of living without retiring later or radically changing their savings and investment behavior. "US workers are rolling over billions of dollars of retirement plan assets and face critical decisions," says Adam Josephson, research associate in the securities and investments group at Celent and author of the report.
Despite the opportunity awaiting financial services firms, few have made any significant changes to accommodate those planning for their retirement. Such firms have introduced a raft of new products to sellthose nearing retirement, including enhanced annuities and target maturity funds. However, the needs of retirees extend far beyond such basic products. More appropriate steps on the part of financial services firms include equipping ones sales force with the technology and expertise to help clients conduct comprehensive retirement planning. Firms that neglect to do so will make their clients lives unnecessarily difficult, and likely their own as well.
The report profiles the strategies of American Century, Colonial Bank, and Wachovia.
A Table of Contents is available online.
of Celent Communications' Retail Securities & Investments, Retail Banking and Life/Health Insurance research services can download the report electronically by clicking on the icon to the left. Non-members should contact email@example.com for more information.