Data & Research November 11, 2008

Boomers Losing Confidence but Staying Optimistic

While only three in 10 of polled Boomers are working with a financial professional, those who are show more optimism about their finances.

Reported by

Fred Schneyer

The recent Wall Street turmoil appears to have made a significant impact on some Americans’ confidence that they can get through retirement with money still in the bank. A Thrivent Financial for Lutherans news release about its recent survey said 58% of respondents were at least somewhat doubtful their financial nest egg will be big enough. Not only that, according to the news release, but 62% are either not confident that they have the proper financial strategy in place (22%) or are unsure of their current financial strategy (40%).

Yet many Boomers may not have specific financial strategies in place to reach their goals. Just three in 10 surveyed (29%) report working with a professional financial representative to help them with their finances. However, those working with a professional were more likely to be optimistic about their long-term financial health than those working alone (70% versus 55%).

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More than half of all Boomers (54%) polled said they expect they will have to delay their retirements as a result of the market volatility. One in four (24%) respondents reported altering their retirement plans.

Even with that said, the news release indicated, three in five Baby Boomers (60%) responded that they are optimistic about their personal long-term financial well-being. Nearly half (45%) of Boomers with incomes of less than $25,000 expressed optimism about their long-term financial futures, while 61% of those earning $25,000 to $49,999 said they had rosy thoughts about their finances.

“Optimism and pessimism about retirement finances seem to have gained equal footing within the psyche of Boomers,” said Jane Zilch, vice president of distribution strategy programs for Thrivent Financial, in the news release. “Despite the urge to hit the panic button, Boomers need to remember that their retirement will last longer than that of their parents. Protect yourself now, but don’t lose sight of longer-term goals. “

While most are not losing sleep, Boomers reported they were finding ways to deal with their financial stress. The most common financial stress reliever among Boomers was spending quality time with one’s family (46%). Other financial stress relievers included stuffing oneself with comfort food (11%), stocking up on antacids (6%), and going shopping (6%).

Data for this survey were collected via eNation online interviews by Synovate. Interviewing took place between October 20 to 23 among a nationwide cross section of 947 U.S. adults age 45 to 64.

In Practice November 11, 2008

Generation Yers Go Their Own Way

Advisers could take note that members of Generation Y might like to make their own investment decisions, but they are also interested in more sources of financial information than other generations.

Reported by

Fred Schneyer

The 2008 American Investor Study, commissioned by online investment firm Scottrade, found that Gen Y uses more sources for financial information than any other generation, including Web sites, newspapers, television, magazines, radio, and financial experts. It is no surprise that Gen Y is the heaviest user of financial Web sites (79% use them, compared with 48% of the total population), but its members also are heavy users of newspapers and television programs.

The survey found that 51% of Gen Y (18 to 26) investors make all investment decisions themselves, compared with 40% of the total population. Just 37% of Boomers (43 to 64) and 32% of seniors (65 and older) say they make their decisions alone.

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“Gen X and Gen Y are highly self-directed and use the Internet to make their own financial decisions, which signals a major generational shift,” said Chris X. Moloney, Scottrade executive director of Customer Intelligence and chief marketing officer, in a news release. “Gen Y is often cited as being an independent-minded generation, and when it comes to investing, this stereotype holds true. They largely are taking financial matters into their hands.”

According to the announcement, more than one-third of Gen Y rate their investment decisions as “better than average,” compared with just one in four among the total population. Just 20% of Gen X (27 to 42), 26% of Boomers, and 23% of seniors claimed their decisions were better than average. Only 1% of Gen Y believe their decisions are below average.

The study, conducted online, received a sample of 1,031 respondents between July 11 and July 23. The study included participants who were at least 18 years of age and either shared responsibility in making financial decisions or were the sole financial decisionmakers in their households.

How Americans make investing decisions:

	Total	Gen Y (18-26)	Gen X (27-42)	Boomers (43-64)	Seniors (65+)
I seek advice from others before making my decisions	50%	44%	47%	54%	54%
I make all the decisions myself	40%	51%	45%	37%	32%
Someone else makes most of the decisions for me	10%	5%	8%	9%	14%