Boston, MA, USA
December
4,
2003
The Baby
Boomers Prepare for Retirement
Report Published by Celent
The population of pre-retirees and retirees is
projected to increase by 30 million by 2020, and to account for about half
of the US population, compared to 44 percent in 2002.
In the next few decades, the baby boomer
generation—those born between 1946 and 1964—will retire. In the US,
the baby boomers number seventy-six million and account for over 28
percent of the population. As they retire, their sheer numbers and wealth
will have an enormous impact on the world’s rich countries. In a new
report, The Baby Boomers Prepare for Retirement, Celent
examines the different facets of the baby boomer generation and the impact
its retirement will have on the financial services industry.
The poverty rate among Americans over the
age of 65 has plummeted, and those over 50 control four-fifths of the
money invested in savings-and-loan associations and own two-thirds of all
shares on the stock market. However, there are many for whom the future
does not look rosy. With personal savings rates near all-time lows and
slightly less than half of all workers participating in an
employer-sponsored pension, and as defined benefit plans become
increasingly rare, many retirees are unlikely to sustain their
pre-retirement standard of living without retiring later or radically
changing their savings and investment behavior. "US workers are
rolling over billions of dollars of retirement plan assets and face
critical decisions," says Adam
Josephson, research associate in the securities and investments
group at Celent and author of the report.
Despite the opportunity awaiting financial services
firms, few have made any significant changes to accommodate those planning
for their retirement. Such firms have introduced a raft of new products to
sell those nearing
retirement, including enhanced annuities and target maturity funds.
However, the needs of retirees extend far beyond such basic products. More
appropriate steps on the part of financial services firms include
equipping one’s sales force with the technology and expertise to help
clients conduct comprehensive retirement planning. Firms that neglect to
do so will make their clients’ lives unnecessarily difficult, and likely
their own as well.
The report profiles the strategies of American
Century, Colonial Bank, and Wachovia.
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