Table of Contents
Scope and Themes
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- What you need to know
- Data sources
- Consumer survey data
- Advertising and promotion
- Abbreviations and terms
- Abbreviations
- Companies mentioned in this report
Executive Summary
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- Industry overview
- Market size and forecast
- Competitive context
- Marketing channels
- Market drivers
- Leading companies
- Advertising and promotion
- The consumer
Insights and Opportunities
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- What are the unique challenges facing Baby Boomers?
- How do Baby Boomers differ in their approach to financial matters?
- What financial products and services are of greatest interest to Baby Boomers?
- What are the best ways to reach this market?
- What are important differences that exist within the Baby Boomer market, demographically and attitudinally?
Inspire Insights
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- Retirement won’t come easy
- Baby Boomers face the new normal
Market Size and Forecast
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- Key points
- Baby Boomers lead for assets and financial product ownership
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- Figure 1: Financial product ownership, by head of household age group, 2007
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- Figure 2: Mutual fund ownership, by generation, 2009
- Banking product ownership indicates opportunity for growth
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- Figure 3: Banking products currently owned: baby boomers indexed to total, April 2008-June 2009
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- Figure 4: Banking product ownership for baby boomers by household income, April 2008-June 2009
- Investment product ownership also indicates opportunity for growth
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- Figure 5: Investment products/accounts currently owned: baby boomers indexed to total
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- Figure 6: Investment product ownership for baby boomers by household income, April 2008-June 2009
- Most Baby Boomer households are in debt
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- Figure 7: Type of debt, by age group, 2007
- Baby Boomers are expected to continue to lead in net assets
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- Figure 8: Share of net worth, spending and income by generation, 2006 versus 2015
- Baby Boomers are about to shift assets from accumulation to income
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- Figure 9: Retirement assets used for retirement income, by asset segment, 2007
Competitive Context
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- Key points
- Baby Boomers continue to be of interest to financial service firms
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- Figure 10: Direct mail, e-mail, print campaigns mentioning “baby boom/baby boomer/boomer”, October 2008-September 2009 versus October 2007-September 2008
- Mutual fund companies are developing products to meet the changing needs of Baby Boomers
- Annuity sales are expected to increase rapidly as Baby Boomers reach retirement age
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- Figure 11: variable annuity sales, by top 10 issuers for 2007 and for 2008
- Banks are also vying for annuity revenues
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- Figure 12: Annuity fee income top 10 bank holding companies: Q1 2009 versus Q1 2008
- Banks are promoting reverse mortgages as a source of retirement income
Marketing Channels
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- Key points
- Baby Boomers are not technology-averse
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- Figure 13: Percentage of Americans online, by age, September 2009
- Baby Boomers are online to gather information, shop, and conduct financial transactions
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- Figure 14: Online activities, by generation, 2008
- Affluent Baby Boomers are especially likely to access the internet daily
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- Figure 15: Daily consumption of selected media, Boomers and Boomer Elite, 2007
- Boomers are still the TV generation
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- Figure 16: Average number of hours spent per month watching TV/using internet, by age, May 2009
Market Drivers
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- Key points
- Baby Boomers will soon swamp the ranks of Seniors
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- Figure 17: U.S. population estimates, 2009
- The Great Recession has taken a toll on Baby Boomers
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- Figure 18: Investment losses, by age group, March 2009
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- Figure 19: Impact of recession, by age group, March 2009
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- Figure 20: Percentage of people who have thought about delaying retirement in past year among adults 18+ with full-time jobs, March 2009
- Retirement confidence has eroded compared to 10 years ago
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- Figure 21: Confidence in financial aspects of retirement in 2009 versus 1999 among workers 25 and older, percentage very confident, 1999 and 2009
- Only a minority of workers are covered by pensions
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- Figure 22: Number of retirement plan active worker participants, 1980-2004
- Annuity sales are expected to increase rapidly as Baby Boomers reach retirement age
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- Figure 23: Annuity sales: fixed versus variable, 1999 through 2008
- Reverse mortgages currently appeal to a small group
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- Figure 24: Whether plan to use home equity to fund retirement among adults 45-64 by age and household income level, October 2009
Leading Companies
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- Key points
- Bank of America is the most frequently used bank by Baby Boomers
- Bank of America is capitalizing on its Merrill Lynch acquisition to target affluent Boomers
- Other large banks seem to be taking a more generalized approach
- Credit unions see an opportunity in the wake of greater risk aversion among Baby Boomers
- Fidelity leads among mutual fund companies
Advertising and Promotion
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- Key points
- Solving anxieties around retirement is a major theme in advertising to Baby Boomers
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- Figure 25: AXA Equitable 800 pound gorilla TV ad, 2009
- Ads urge Baby Boomers to face up to retirement planning
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- Figure 26: Ameriprise Dennis Hopper TV ad, 2009
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- Figure 27: Prudential Retirement Red Zone TV ad, 2009
- Some ads use nostalgia for the ’60s and ’70s
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- Figure 28: Geico survived the ‘60s tv ad, 2009
- Targeting boomers with print and direct mail
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- Figure 29: BankAmerica credit card acquisition direct mail ad, November 2009
- Figure 30: The Hartford Insurance direct mail acquisition ad, 2009
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- Figure 31: 21st Century insurance direct mail acquisition ad, 2009
- Figure 32: Chase AARP co-branded credit card acquision direct mail ad, 2009
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- Figure 33: American Express direct mail acquisition ad, 2009
- Figure 34: CUNA long term care insurance direct mail ad, 2009
- Reverse mortgage companies have been targeting older homeowners with direct mail
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- Figure 35: Financial freedom print ad, 2009
- Figure 36: Bank of America print ad, 2009
- Figure 37: Wells Fargo print ad, 2009
- Figure 38: Financial freedom print ad, 2009
The Consumer
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- Key points
- Baby Boomers were especially hard hit by the economic downturn
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- Figure 39: Economic outlook: baby boomers indexed to total, April 2008-June 2009
- Baby Boomers are juggling many financial concerns
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- Figure 40: Financial concerns (top 2 box - very concerned and concerned) by age and household income, October 2009
- A majority of Baby Boomers do not have an adequate safety net
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- Figure 41: Concerns about adequate safety net and impacts of job loss among baby boomers, 2009
- Middle-aged Americans are experiencing a crisis in confidence about their retirement prospects
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- Figure 42: Respondents very confident (top box) about finances in retirement, 2009
- Retirement savings for many Baby Boomers are well below needed levels
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- Figure 43: Total assets in household’s retirement accounts by age and household income, October 2009
- Erosion of retirement confidence has put retirement plans on hold for some Baby Boomers
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- Figure 44: Employment/retirement plans at age 67, 2009
- Many Baby Boomers are rethinking retirement
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- Figure 45: Retirement plans among U.S. adults 45-64, by age and income level
- Baby Boomers are ratcheting up savings to make up shortfalls
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- Figure 46: Steps taken or plan to take as a result of economic crisis, 2009
- Most can’t rely on substantial pensions or an inheritance
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- Figure 47: Whether expect to receive a pension among adults 45-64, by age and household income level, October 2009
- Many have not done retirement planning
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- Figure 48: Retirement planning among U.S. adults 45-64, by age and household income, October 2009
- Boomers rely on a variety of sources for financial information
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- Figure 49: Sources of financial information among Baby Boomers 45-64, by gender and age, October 2009
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- Figure 50: Sources of financial information among adults 45-64, by household income, October 2009
- Independent advisors are the most trusted source of retirement planning advice
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- Figure 51: Most trusted sources of financial advice among Baby Boomers, by age and household income level, October 2009
- The vast majority of Baby Boomer women participate in decision-making about retirement savings
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- Figure 52: Who in household makes decisions about retirement savings among adults 45-64, by gender and age
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- Figure 53: Financial attitudes among women ages 45-64 versus 65 and older, April 2008-June 2009
- However, Baby Boomer women express less confidence about financial matters than men
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- Figure 54: Attitudes about financial information among Baby Boomers, by gender, 2009
Cluster Analysis
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- Key points
- Formulators
- Lighthearts
- Informals
- Cluster characteristics
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- Figure 55: Baby Boomer finance clusters, November 2009
- Figure 56: Retirement planning activities, by Baby Boomer finance clusters, November 2009
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- Figure 57: Sources of information used, by Baby Boomer finance clusters, November 2009
- Figure 58: Concerns about retirement, by Baby Boomer finance clusters, November 2009
- Cluster demographics
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- Figure 59: Baby Boomer finance clusters, by gender, November 2009
- Figure 60: Baby Boomer finance clusters, by age group, November 2009
- Figure 61: Baby Boomer finance clusters, by household income group, November 2009
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- Figure 62: Baby Boomer finance clusters, by Hispanic origin, November 2009
- Cluster methodology
Appendix: Trade Associations
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