Seven Implications for the Coming Retirement Revolution
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Most advisors look to seniors as a core part of their client base.
That’s why it’s essential to understand how boomers are going to transform retirement, just as they have redefined every other stage of their lives. Let’s look at three new pieces of research and the seven implications they carry for retirement planning.
A leading researcher’s perspective
Michael Adams is founder of Environics Research Group, a leader in social values research and author of a recent book on boomers in retirement. He contrasts the attitudes towards retirement of today’s early boomers (aged 53 to 62) with the previous generation of retirees, who were in their sixties in 1992. As an example, he looked at today’s intentions for retirement among boomers compared to early retirees 20 years ago. Boomers are dramatically more likely to plan to engage in active outdoor pursuits, explore exotic places and take classes to develop their interests.
They’re also more likely to be concerned about having enough money throughout their retirement; six in 10 intend to work in retirement, almost twice the level of retirees in 1992.
This will lead to stresses as boomers’ “I want it all and I want it now” mindset clashes with their ability to pay for this – and will also challenge advisors in developing retirement plans to fund some of those planned activities.
Not their parents’ retirees
A recent Merrill Lynch survey of affluent American boomers aged 46 to 64 provides hard data on the extent to which boomers are planning to operate entirely differently in retirement than previous retirees.
Here are some of the survey findings among these boomers, all with investments of at least $250,000. First of all, they were asked to compare their expectations to their parents’ retirement:
- 86% plan a more active lifestyle
- 84% say their retirement will look different
- 72% expect a higher standard of living
Digging deeper in the kinds of activities boomers anticipate in retirement confirms some of the data from Michael Adams’ research:
- 70% plan to keep working
- 32% expect to pursue additional professional success
- 26% anticipate to take courses and continue their education
- 24% plan to learn a new trade
- 20% expect to start or further their own business