The Retirement Products Market for Baby Boomers and Generation X in the U.S.
Packaged Facts
October 20, 2008 287 Pages - SKU: LA1715034
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Countries covered: United States
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Total U.S. retirement assets were valued at $17.6 trillion in 2007, up more than six percent over 2006. The largest part of these assets is divided almost evenly among individual retirement accounts, defined contribution plans and government pension plans. However, IRAs and annuities posted the biggest compound annual growth rates.
The United States is confronted with major issues that are shaping retirement planning and retirement products. A look at the big picture starts with a fundamental question: What is retirement? It then introduces economic, social and political issues that shape the national conversation about retirement and the individual's role in planning for his or her own retirement.
The Retirement Products Market for Baby Boomers and Generation X in the U.S. is a comprehensive treatment of the market's growth (including two forecasts), market drivers for these products, including trends in retirement attitudes, the economic outlook, solvency outlooks for Social Security, Medicare and Medicaid, changing lifestyles of the two generations and how to determine appropriate investment goals in retirement planning.
Demographic and psychographic characteristics, as well as patterns in household computer/media usage, of these generational markets are presented, supported by in-depth survey data from Simmons Market Research Bureau. Products for the retirement instruments market, including personal, self-employment and corporate products are explained, along with in-depth ownership data, relevant legislative and regulatory developments and specific innovative products. Distribution channels, as well as trends in marketing and advertising campaigns, are portrayed, illustrated with in-depth treatments of seven significant marketing programs.
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- Chapter 1: Executive Summary
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- Scope of Report
- Report Methodology
- On the verge of a retirement boom
- What is retirement?
- Retirement as life enrichment; retirement as a new career phase
- Economic outlook and its impact on retirement planning
- Faith No More: 77% Lack Confidence in Economy
- Table 1-1: Percentage of Adults with Little or No Confidence in Short-Term Prospects for the Economy, October 2007-April 2008 (U.S. adults)
- Economic pessimism carries over to retirement outlook
- Long-term lack of market confidence
- Solvency outlook for Social Security, Medicare and Medicaid
- Changing lifestyles of the pre-retirement market
- Financial generosity may imperil Boomers’ ability to age in place
- Generation X outlook and concerns differ significantly from those of older generations
- The number and the specter of saving too much
- Americans recognize they don’t save enough
- Demographics
- Introduction
- Non-Hispanic white percentage increases
- Gen X more likely to be college grads
- Figure 1-1: Ethnicity: Baby Boomers and Generation X, 2007-2008 (percent)
- Figure 1-2: Highest Level of Educational Attainment: Baby Boomers and Generation X, 2007-2008 (percent)
- Baby Boomers and Gen X favor full-time employment
- Both Baby Boomers and Gen X outearn adults in general
- Boomers most likely to have highest household income
- Figure 1-3: Individual Employment Income: Baby Boomers and Generation X, 2007-2008 (percent)
- Figure 1-4: Household Income: Baby Boomers and Generation X, 2007-2008 (percent)
- The Retirement Instruments Market
- Overview of retirement resources
- Table 1-2: U.S. Retirement Assets By Type, 1998-2007 (in trillions of dollars)
- Projections of retirement resources
- Figure 1-5: Projections of U.S. Retirement Assets by Type: Straight Line Projections, 2008-2012 (in billions of dollars)
- Figure 1-6: Projections of U.S. Retirement Assets by Type: Adjusted for Nominal GDP as Projected by Congressional Budget Office, 2008-2012 (in billions of dollars)
- Retirement resources from the individual’s perspective
- All income sources
- Table 1-3: Annual Income Saved During Last Year, 2008(percent)
- Table 1-4: Confidence in Saving Enough to Meet Future Needs, 2008 (percent)
- Current financial and retirement resources of Baby Boomers and Gen X
- Financial investment products
- Baby Boomers tend to have more financial products than Gen Xers
- Table 1-5: Overview of Ownership of Investment Products, 2007-2008 (percent of U.S. adults)
- Individual/small business retirement products
- Table 1-6: IRA Ownership, 2007-2008 (percent of U.S. adults)
- Self-directed IRAs
- Solo 401k
- Proposed legislation
- SEPs and Keoghs
- Figure 1-7: Keogh/Sep-Ira/Pension Ownership, 2007-2008 (percent of U.S. adults)
- Annuities
- Figure 1-8: Ownership of Tax-Sheltered Annuities, 2007-2008 (percent of U.S. adults)
- Reverse mortgages and home equity
- How reverse mortgages work
- Positive outlook for reverse mortgages
- Long-term care insurance
- Individual LTCi
- Figure 1-9: Individual LTCi Sales By Issue Age, 2007 (percent)
- Group LTCi
- Figure 1-10: Group LTCi Sales by Issue Age, 2007 (percent)
- The LTCi purchasing decision?
- Life insurance
- Life insurance settlements
- Inheritance
- Famous “Boomer inheritances” going to elders
- Focus on Employer-Sponsored Retirement Products
- The employee perspective
- Pensions/defined benefit plans
- Cash balance plans
- Defined contribution plans
- 401ks
- Table 1-7: 401k Ownership, 2007-2008 (percent of U.S. adults)
- 401k fallout from 2008 financial crisis
- Impact of the Pension Protection Act of 2006
- Annuities surfacing as intriguing 401k option
- Exchange Traded Fund (EFT) 401k platform
- Collective investment funds
- 401k debit cards
- Lifestyle and lifecycle funds
- Advice is welcome!
- Advice to troubled mortgage holders
- Automatic enrollment
- 401k rollovers
- 403bs
- 457 plans
- Chapter 2: Market Drivers
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- Scope of Report
- Report methodology
- On the verge of a retirement boom
- What is retirement?
- Retirement as life enrichment
- Many anticipate earned income in “retirement”
- Economic outlook and its impact on retirement planning
- Faith No More: 77% Lack Confidence in Economy
- Table 2-1: Percentage of Adults with Little or No Confidence in Short-Term Prospects for the Economy, October 2007-April 2008 (U.S. adults)
- Economic pessimism carries over to retirement outlook
- Long-term lack of market confidence
- Stock market climb in long-term stall
- Cautious forecasting advised
- Weak housing market wiping out billions of dollars in home equity
- Boomer sell-off not the problem
- Uneven distribution of wealth
- What the numbers tell us: 2008 real GDP growth forecasted at a meager 1.1%
- Figure 2-1: U.S. Current-Dollar GDP vs. Real GDP, 2000-2008 (in trillions of dollars)
- GDP price index ticked up
- Figure 2-2: Percentage Changes in U.S. Current-Dollar: GDP, Real GDP and the GDP Price Index, 2002-2008
- Economic future uncertain
- Personal consumption slows
- Figure 2-3: U.S. Current-Dollar vs. Real Personal Consumption Expenditures, 2000-2007 (in billions of dollars)
- Figure 2-4: Percentage Changes in U.S. Current-Dollar vs. Real Personal Consumption Expenditures and Inflation, 2001-2008
- Solvency outlook for Social Security, Medicare and Medicaid
- Changing lifestyles of the pre-retirement market
- Boomerang effect re-mixes generations
- Career, family disasters can force even Boomers back home
- Adult kids and grandchildren? boomerang, once removed
- Childcare can add additional burden for Boomer grandparents
- Boomer home caregivers number in millions
- Financial generosity may imperil Boomers’ ability to age in place
- Generation X outlook and concerns differ significantly from those of older generations
- Gen X is cautious, even pessimistic
- Insufficient financial resources impede retirement preparations
- Blogging for dollars
- The number and the specter of saving too much
- The possibility Americans are undersaving . . . or oversaving
- Americans recognize they don’t save enough
- Inheritance dreams (or mirages)
- Chapter 3: Demographics
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- Introduction
- Looking at the numbers
- Aged share of population grows over time
- People who reach age 75 will live another 12 years on average
- Table 3-1: Projected Population of the U.S. through 2050 (percentages by age group)
- Figure 3-1: Projected Life Expectancy, 2010 (in years)
- Impressive Gains In Life Expectancy
- Figure 3-2: Life Expectancy: 1900, 2000 and 2003 (in years)
- Simmons Consumer Survey
- More women than men at every age
- Figure 3-3: Gender: Baby Boomers and Generation X, 2007-2008 (percent)
- Non-Hispanic white percentage increases with increasing age
- Figure 3-4: Ethnicity: Baby Boomers and Generation X, 2007-2008 (percent)
- Geographic patterns of generations show slight variance
- Figure 3-5: Geographic Region: Baby Boomers and Generation X, 2007-2008 (percent)
- Gen X more likely to be college grads
- Figure 3-6: Highest Level of Educational Attainment: Baby Boomers and Generation X, 2007-2008 (percent)
- Figure 3-7: Undergraduate or Graduate College Degree: Gen X Segments, 2007-2008 (percent)
- Baby Boomers and Gen X favor full-time employment
- Figure 3-8: Employment Status: Baby Boomers and Generation X, 2007-2008 (percent)
- Gen Xers prominent in managerial and professional/technical occupations
- Both Baby Boomers and Gen X outearn adults in general
- Figure 3-10: Profession: Baby Boomers and Generation X, 2007-2008 (percent)
- Figure 3-11: Individual Employment Income: Baby Boomers and Generation X, 2007-2008 (percent)
- Gen X rich in dual-income households
- Figure 3-12: Number of Employed Adults in Household: Baby Boomers and Generation X, 2007-2008 (percent)
- Boomers most likely to have highest household income
- Figure 3-13: Household Income: Baby Boomers and Generation X, 2007-2008 (percent)
- Figure 3-14: Household Income $75,000 or More: Baby Boomer and Generation X Segments, 2007-2008 (percent)
- Baby Boomers and Gen X more likely to be married
- Figure 3-15: Marital Status: Baby Boomers and Generation X, 2007-2008 (percent)
- Larger households are younger households
- Figure 3-16: Number of People in Household: Baby Boomers and Generation X, 2007-2008 (percent)
- Younger householders = more children
- Figure 3-17: Number of Children in Household: Baby Boomers and Generation X, 2007-2008 (percent)
- Boomers more likely to own residence
- Figure 3-18: Kind of Residence: Baby Boomers and Generation X, 2007-2008 (percent)
- Values of residences similar among age groups
- Figure 3-19: Value of Residence: Baby Boomers and Generation X, 2007-2008 (percent)
- Health/long-term care outlook
- Healthy, active self-image keeps Boomers in the game
- Healthcare challenges multiply
- Table 3-2: Health Problems By Age (percent of respondents)
- Studies confirm Boomers are often too fat, out of shape
- Drugs, therapies combat chronic complaints
- What about Generation X’s health?
- Table 3-3: Leading Causes of Death By Age (ranking)
- Employment trends
- Boomers plan to continue employment
- Difficulties in finding employment in middle age
- Boomers fear layoffs, forced retirement
- Loss of job can mean underfunded future
- Self-employment a viable option
- Male Boomerpreneurs outnumber females, but gap closing
- Preventing the Boomer brain drain
- Diverse self-employed segment may forecast future entrepreneurship
- Boomers create their own businesses
- Self-employed Boomers want to stick with it
- Part-time employment in retirement
- Employment prospects for Gen X as they approach retirement?
- Characteristics of those with greater financial resources
- Ethnicity of higher-income adults varies between Baby Boomers and Gen X
- Figure 3-20: Ethnicity of Higher Income Baby Boomers and Generation X: 2007-2008 (percent)
- Higher education correlates with higher-income households
- Figure 3-21: Highest Level of Educational Attainment of Higher Income Baby Boomers and Generation X: 2007-2008 (percent)
- Most types of jobs = more money
- Figure 3-22: Professions of Higher Income Baby Boomers and Generation X: 2007-2008 (percent)
- Marriage associated with higher income
- Figure 3-23: Marital Status of Higher Income Baby Boomers and Generation X: 2007-2008 (percent)
- Figure 3-24: Number of Children in Household of Higher Income Baby Boomers And Generation X: 2007-2008 (percent)
- Higher-income Boomers and Gen Xers more likely to own higher-value homes
- Figure 3-25: Kind of Residence of Higher Income Baby Boomers and Generation X: 2007-2008 (percent)
- Figure 3-26: Value of Residence of Higher Income Baby Boomers and Generation X: 2007-2008 (percent)
- Table 3-4: Overview of Demographic Data, 2007-2008 (percent and index)
- Table 3-5: Overview of Higher-Income Demographic Data, 2007-2008 (percent and index)
- Chapter 4: Psychographics
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- Simmons Consumer Survey
- Fundamental attitudes and impact on retirement planning
- Figure 4-1: “I Enjoy Taking Risks,” Agree A Lot: 2007-2008 (percent of U.S. adults)
- Figure 4-2: “I Am An Optimist,” Agree A Lot: 2007-2008 (percent of U.S. adults)
- Less than half believe financial security in retirement is the individual’s responsibility
- Figure 4-3: “Financial Security for Retirement Is Individual’s Responsibility,” Agree A Lot: 2007-2008 (percent of U.S. adults)
- Figure 4-4: “I Know As Much As Possible Before I Commit To Financial Services,” Agree A Lot: 2007-2008 (percent of U.S. adults)
- Figure 4-5: “I Feel Secure Financially,” Agree A Lot: 2007-2008 (percent of U.S. adults)
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- Figure 4-6: “Investing In The Stock Market Is Too Risky,” 2007-2008 (percent of U.S. adults)
- Figure 4-7: “I Prefer to Let Professionals Do My Taxes,” Agree A Lot, 2007-2008 (percent of U.S. adults)
- Baby Boomers’ beliefs largely reflect those of adults overall
- Gen Xers lag overall population in certain financial attitudes
- Implications
- Attitudes of higher-income Baby Boomers and Gen Xers
- Figure 4-8: “Financial Security for Retirement Is Individual’s Responsibility,” All Adults and $75,000+ Households, Agree A Lot: 2007-2008 (percent of U.S. adults)
- Figure 4-9: “I Know As Much As Possible Before I Commit to Financial Services,” All Adults and $75,000+ Households, Agree A Lot: 2007-2008 (percent of U.S. adults)
- Figure 4-10: “I Feel Secure Financially,” All Adults and $75,000+ Households, Agree A Lot: 2007-2008 (percent of U.S. adults)
- Figure 4-11: “I Leave Financial Arrangements to Someone Else,” All Adults and $75,000+ Households, Agree A Lot: 2007-2008 (percent of U.S. adults)
- Figure 4-12: “Investing iIn the Stock Market Is too Risky,” All Adults and $75,000+ Households, Agree A Lot: 2007-2008 (percent of U.S. adults)
- Figure 4-13: “I Prefer to Let Professionals Do My Taxes,” All Adults and $75,000+ Households, Agree A Lot: 2007-2008 (percent of U.S. adults)
- Computers and financial planning
- Gen X prefers online financial activities
- Figure 4-14: Internet Usage, 2007-2008 (percent of U.S. adults)
- Figure 4-15: Online Activities and Websites Visited, Last 30 Days: 2007-2008 (percent of U.S. adults)
- Figure 4-16: Selected Financial Reading Activities in Last 6 Months: 2007-2008 (percent of U.S. adults)
- Higher-income Baby Boomers and Gen Xers differ from each other in use of financial media
- Figure 4-17: Internet Usage, Higher-Income Adults ($75,000+ Households): 2007-2008 (percent of U.S. adults)
- Figure 4-18: Online Activities, Last 30 Days, Higher-Income Adults ($75,000+ Households): 2007-2008 (percent of U.S. adults)
- Figure 4-19: Selected Financial Reading Activities in Last 6 Months, Higher-Income Adults ($75,000+ Households): 2007-2008 (percent of U.S. adults)
- Empty-nest, older segments favor online financial management
- Table 4-1: Overview of Psychographic Data, 2007-2008 (percent and index)
- Table 4-2: Overview of Psychographic Data, 2007-2008 (percent and index)
- Table 4-3: Higher-Income Household Baby Boomer Psychographic Data, 2007-2008 (percent and index)
- Table 4-4: Higher-Income Household Generation X Psychographic Data, 2007-2008 (percent and index)
- Table 4-5: Overview of Computer/Media Use Patterns, 2007-2008 (percent and index)
- Table 4-6: Higher-Income Household Computer/Media Use Patterns, 2007-2008 (percent and index)
- Chapter 5: The Retirement Instruments Market
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- Overview of retirement resources
- Table 5-1: U.S. Retirement Assets By Type, 1998-2007 (in trillions of dollars)
- Projections of retirement resources
- Figure 5-1: Projections of U.S. Retirement Assets by Type: Straight Line Projections, 2008-2012 (in billions of dollars)
- Figure 5-2: Projections of U.S. Retirement Assets by Type: Adjusted for Nominal GDP as Projected by Congressional Budget Office, 2008-2012 (in billions of dollars)
- Retirement resources from the individual’s perspective
- All income sources
- Table 5-2: Annual Income Saved During Last Year, 2008 (percent)
- Table 5-3: Confidence in Saving Enough to Meet Future Needs, 2008 (percent)
- Current financial and retirement resources of Baby Boomers and Gen X
- Financial investment products
- Baby Boomers tend to have more financial products than Gen Xers
- Table 5-4: Overview of Ownership of Investment Products, 2007-2008 (percent of U.S. adults)
- Table 5-5: Value of Securities Owned, 2007-2008 (percent of U.S. adults)
- Table 5-6: Mutual Fund Values, 2007-2008 (percent of U.S. adults)
- Table 5-7: Money Market Values, 2007-2008 (percent of U.S. adults)
- Brokerage accounts dispersed among many providers
- Table 5-8: Mutual Fund/Brokerage Accounts, 2007-2008 (percent of U.S. adults)
- Table 5-9: Retirement Accounts, 2007-2008 (percent of U.S. adults)
- Banking and investment products
- Savings accounts are leading banking/investment products
- Table 5-10: Ownership of Bank Products, 2007-2008 (percent of U.S. adults)
- Bank of America is leader in banking
- Table 5-11: Banks Used in Last 12 Months, 2007-2008 (percent of U.S. adults)
- Insurance products
- Table 5-12: Life Insurance Companies, 2007-2008 (percent of U.S. adults)
- Financial products owned by higher-income Baby Boomers and Gen Xers
- Table 5-13: Ownership of Financial Products By Higher-Income Households, 2007-2008 (percent of U.S. adults)
- Individual/small business retirement products
- IRAs
- Table 5-14: IRA Ownership, 2007-2008 (percent of U.S. adults)
- Traditional IRA versus Roth
- Self-directed IRAs
- Solo 401k
- Structuring retirement funds to finance a new business
- Proposed legislation
- SEPs and Keoghs
- Table 5-15: Keogh/Sep-Ira/Pension Ownership, 2007-2008 (percent of U.S. adults)
- Annuities
- Table 5-16: Ownership of Tax-Sheltered Annuities, 2007-2008 (percent of U.S. adults)
- Single premium immediate annuity (SPIA)
- Living benefits
- Reverse mortgages and home equity
- How reverse mortgages work
- Table 5-17: Annual HECM Production, FY 1990-FY 2008 (number of loans)
- Positive outlook for reverse mortgages
- Long-term care insurance
- Table 5-18: Long-Term Care Insurance: Industry Experience (2006 annual statement reporting year, reported 2005)
- Individual LTCi
- Figure 5-3: Individual LTCi Sales By Issue Age, 2007 (percent)
- Figure 5-4: Individual LTCi Claimant Age for New Claims Opened, 2007 (percent)
- Group LTCi
- Figure 5-5: Group LTCi Sales by Issue Age, 2007 (percent)
- Figure 5-6: Group LTCi Claimant Age for New Claims Opened, 2007 (percent)
- The LTCi purchasing decision?
- Innovative LTCi products
- Life insurance
- Life insurance settlements
- Disability income insurance
- Mutual fund products designed for retirement investing
- Inheritance
- Famous “Boomer inheritances” going to elders
- Distribution phase
- Table 5-18: Overview of Financial Products Data, 2007-2008 (percent and index)
- Table 5-19: Overview of Financial Products Data, 2007-2008 (percent and index)
- Chapter 6: Focus on Employer-Sponsored
Retirement Products
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- The employee perspective
- Pensions/defined benefit plans
- Cash balance plans
- 412(i) plans
- Defined contribution plans
- 401ks
- Status of 401k plans
- Participation by age
- Table 6-1: 401k Ownership, 2007-2008 (percent of U.S. adults)
- 401k fees
- 401k fallout from 2008 financial crisis
- Impact of the Pension Protection Act of 2006
- New 401k products and features
- Roth 401ks
- Annuities surfacing as intriguing 401k option
- Representative annuity products
- Exchange Traded Fund (EFT) 401k platform
- Representative exchange-traded funds
- Collective investment funds
- 401k debit cards
- Lifestyle and lifecycle funds
- Managed accounts
- Advice is welcome!
- Representative products and programs
- Advice to troubled mortgage holders
- Automatic enrollment
- 401k/cash balance combo
- 401k rollovers
- Legal challenges
- Financially troubled employer sued for stock losses in 401k plan
- 403bs
- Administrative and information services
- 403b litigation
- Representative programs
- 457 plans
- Simple IRAs
- Defined contribution recordkeepers
- Table 6-2: Top 10 Defined Contribution Recordkeepers By Total Recordkeeping Assets, 2008 (in millions of dollars)
- Table 6-3: Top 10 Defined Contribution Recordkeepers By Recordkeeping Assets in 401k Plans, 2007 (in billions of dollars)
- Table 6-4: Top 10 Defined Contribution Recordkeepers By Recordkeeping Assets in 403b Plans, 2007 (in billions of dollars)
- Table 6-5: Top 10 Defined Contribution Recordkeepers By Recordkeeping Assets in 457 Plans, 2007 (in billions of dollars)
- Chapter 7: Distribution Channels; Marketing and Advertising Campaigns
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- Introduction
- Financial planners
- Banks
- Mutual fund and investment management companies
- Representative products
- Insurance agents
- Internet/direct response
- Marketing and Advertising Campaigns
- Targeting Baby Boomers
- Targeting Generation X
- Seven Case Studies
- Bank of America
- Charles Schwab
- Edward Jones
- Fidelity Investments
- MetLife
- New products
- Research and education
- Publicity, marketing and distribution programs
- Nationwide
- Wachovia
- Other Companies Worthy of Note
- Allstate
- Ameriprise Financial
- Citigroup
- John Hancock
- Liberty Mutual
- Lincoln Financial
- Wells Fargo
- New media
- YouTube meets financial literacy
Appendix: Addresses of Selected Companies, Trade and Research Organizations
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