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Baby Boomers and Finance - US - November 2015

Baby Boomers and Finance - US - November 2015

Financial services institutions may be focusing a lot of attention on Millennials, but Boomers are still a very influential group. According to the US Bureau of Labor Statistics’ Consumer Expenditure Survey, Boomers earn an estimated $2.4 trillion each year. This report examines how the Boomers feel about retirement: how much they have saved for it; their plans for how to live it; and their major concerns about retirement life.

This report looks at the following areas:

Many haven't saved enough and they know it
Boomers are not loyal to their financial institution


What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Figure 1: Concerns about retirement life, by amount of retirement savings, August 2015
Figure 2: Purchased multiple products from primary financial institution, by generation, January 2015
The opportunities
Figure 3: Use of financial advisers, by amount of retirement savings, August 2015
Figure 4: Boomers’ level of trust in financial services institutions, January 2015
Figure 5: Life insurance needs, by age, August 2015
What it means
THE MARKET
What you need to know
Boomers are still relevant
Boomers are not very diverse
Low interest rates have hurt
Longer life expectancies
Market size
Boomers are still one-quarter of US population
Figure 6: US population, by generation, 2010-20
Market breakdown
The racial diversity of Boomers
Figure 7: Distribution of generations by race and Hispanic origin, 2015
More female Boomers than male
Figure 8: US population, generations by gender, 2015
Market factors
Impact of low interest rate environment
Boomers’ investments in equities
Life expectancies are increasing
Figure 9: Life expectancy in US, 1980-2012
KEY PLAYERS
What you need to know
Aging in place – A new trend
Boomers are starting businesses
Single Baby Boomers are struggling
Workplace flexibility helps Boomers continue to work
What’s in?
Boomers want to age in place
Figure 10: Plans to move in retirement, by generation, August 2015
Boomers are well-positioned to start businesses
What’s struggling?
The effect of Social Security payments on Boomers
Figure 11: Finances in retirement, by gender and age and Hispanic origin, August 2015
More single Baby Boomers
Figure 12: Retirement savings, by marital status, August 2015
Many Boomers are not taking steps to improve their retirement prospects
Figure 13: Attitudes toward retirement, by generation, August 2015
Lack of planning leads to miscalculations
Figure 14: Baby boomers’ steps taken toward retirement planning, January 2015
What’s next?
Flexible work schedules are helping Boomers continue working
Figure 15: Desire to work after retirement, by age, gender and household income, August 2015
Growth of the sharing economy
Boomers are selling – And starting – Small businesses
Boomers’ effect on the housing market
Figure 16: Importance of owning a home, by generation, May 2015
What you need to know
Most Boomers have never retired
Most haven’t waited for full Social Security benefits
Money and health – Two main concerns
Most do have retirement savings
Advisers can help Boomers realize plans
Boomers aren’t comfortable with their saving, but are not getting help
Retirement status
Most Boomers have never retired
Figure 17: Retirement status, by gender, August 2015
The role of age and income in decision to retire
Figure 18: Retirement status, by age and household income, August 2015
The impact of education on retirement
Figure 19: Retirement status, by level of education, August 2015
Health considerations are a major reason for young Boomer retirement
Figure 20: Reasons for retiring, by gender and age, August 2015
At what age do Boomers retire?
Maximum Social Security benefits not a driving retirement force
Figure 21: Age at retirement, by gender and age, August 2015
Most won’t retire until after age 65
Figure 22: AARP online retirement planning ad, 2015
Impact of marital status
Figure 23: Age plan to retire, by marital status, August 2015
The role of income in determining retirement age
Figure 24: Age plan to retire, by household income, August 2015
Concerns about retirement life
Most are worried about money
Figure 25: Concerns about retirement life, by age, August 2015
Priorities change with savings
Figure 26: Concerns about retirement, by retirement savings, August 2015
Type of retirement account(s) owned
Most Boomers have a retirement account
Figure 27: Type of retirement account(s) owned, by generation, August 2015
Women are less likely to have corporate-sponsored plans
Figure 28: Type of retirement account, by gender, August 2015
Minority Boomers have fewer retirement accounts
Figure 29: Type of retirement account, by race, Hispanic origin, August 2015
Amount of retirement savings
Many late Boomers may be in trouble
Figure 30: Amount in retirement savings, by generation, August 2015
Women Boomers lag men
Figure 31: Amount in retirement savings, by gender and age, and generation, August 2015
Single Boomers are in trouble
Figure 32: Amount in retirement savings, by marital status, August 2015
Figure 33: Wells Fargo Retirement Resources email, 2015
Plans for retirement
Most looking forward to traveling
Figure 34: Plans for retirement, by generation, August 2015
Family is important to Hispanics
Figure 35: Plans for retirement, by Hispanic origin, August 2015
Many want to stay active
Figure 36: Plans for retirement, by generation, household income, August 2015
Managing money
Most don’t know enough
Figure 37: Money management activities, by gender and age, August 2015
Whites and married couples are in better shape
Figure 38: Money management activities, by race and marital status, August 2015
Advisers not used by many
Figure 39: Money management activities, by amount of retirement savings, August 2015
Figure 40: AARP direct mail and online ads, 2015
Source of retirement income
Figure 41: Source of retirement income, by gender, generation, August 2015
Factors affecting retirement income
What Boomers are counting on for income
Figure 42: Factors affecting retirement income, by gender, generations, August 2015
Race and income have an effect
Figure 43: Factors affecting retirement income, Hispanic origin, household income, August 2015
Attitudes toward retirement
Lack of excitement about retirement due to lack of comfort about money
Figure 44: Attitudes toward retirement, by gender, generation, August 2015
Life in retirement
Figure 45: Retirement assumptions, by gender, generations, August 2015
Race and income affect retirement life
Figure 46: Retirement assumptions, by race, household income, August 2015
Retirement readiness
Figure 47: Retirement readiness, by gender, generation, August 2015
APPENDIX
Data sources and abbreviations
Data sources
Abbreviations and terms
US Research Methodology
Consumer research
Social Media Research
Trade research
Statistical Forecasting

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