Data & Research December 19, 2012

Boomer Groups Have Different Needs

 There is a stark contrast between the 1st Wave Baby Boomers, ages 57 to 66, and the 2nd Wave, ages 48 to 56, Cogent Research found.

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The 2nd Wave of Boomers share more of the attitudes, beliefs and behaviors of younger investors than they do of 1st Wave Boomers. Slightly fewer, 63%, of 2nd Wave Boomers are working with an adviser than 1st Wave Boomers (66%), and they are significantly less satisfied (58% versus 69%) with these relationships.

Nearly half (48%) of 1st Wave Boomers are retired, compared with only 9% of 2nd Wave Boomers who have left the workforce. As a result, only 57% of older Boomers still own an employer-sponsored retirement plan, compared with 81% of their younger counterparts.

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“The financial services industry has spent the better part of a decade treating Boomers as a single and cohesive group,” said Meredith Lloyd Rice, senior project director at Cogent and author of the report. “For a number of years they were becoming more similar. However, these new findings suggest companies need to take another look and potentially separate how they are addressing the ongoing needs of investors who are today between the ages of 48 and 56, versus how relationships with older Boomers were managed leading up to their retirement.”

Data & Research December 18, 2012

Retirement Savings Focus Needed in U.S.

A majority (80%) of investors polled say the U.S. government should make it a national priority to encourage Americans to save.
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Eight in 10 investors (83%) say the 401(k) and similar tax-advantaged accounts are “extremely” important (43%) or “very” important (40%) to the ability of Americans to retire comfortably in the future. Sixty-nine percent each say it is “extremely” or “very important” that the government find ways to financially encourage every company to offer its employees a 401(k) retirement savings option and to financially encourage every American to participate in their employer’s 401(k) retirement savings option, according to the Wells Fargo-Gallup Investor and Retirement Index.  

Two-thirds of respondents (66%) each say it is “extremely” or “very important” that the government find ways to allow Americans with 401(k) retirement savings to obtain more quality investment advice and to allow Americans more investment flexibility with their 401(k) retirement savings. In addition, more than three-fourths (76%) of investors say the current administration should make strengthening Social Security so that it exists for future generations a priority over the next four years.  

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When investors were asked whose responsibility it is to see that Americans have the opportunity to build savings for a comfortable retirement, nearly six in ten (58%) say it is a “shared” responsibility between government, business (in the form of a pension) and the individual. More than one-third (36%) say the individual is responsible.

(Cont’d…)

When asked who is responsible for teaching Americans to save, 88% of respondents point to parents and family as having a “great deal” or “quite a lot” of responsibility, 84% indicate individuals on their own, and, rounding out the top three, 67% of investors point to financial advisers as having a “great deal” or “quite a lot” of responsibility to teach saving. Others cited were bankers (60%), teachers (55%) and employers (48%).  

Sixty-nine percent of investors say they are “somewhat” to “extremely” worried they will outlive their savings in retirement, while 68% are “somewhat” to “extremely” worried they will experience a large reduction in their standard of living during retirement, and 56% are worried they will be forced to work during retirement to maintain their standard of living. More than half of investors (55%) say they have taken the time to do a calculation about their future retirement needs, while 43% say they have “guessed” at the savings they will need.   

Thirty-seven percent of all investors say they have a specific written plan for retirement, up from 31% in July and 28% percent in May. Seventy-six percent of nonretired and 72% of retired Americans say having a financial plan with specific goals and targets gives them “confidence” they’ll meet their financial goals.   

Among those who did not have a specific financial plan for retirement, 44% of the nonretired cite “not having enough money” as the main reason, while 18% say they did not have the time to make a plan, and 12% say they did not need a plan.  

The Wells Fargo-Gallup Investor and Retirement Optimism Index survey was conducted November 9 to 17, 2012, and included 1,024 investors randomly selected from across the country.

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