Yesterday's New Research on Retirement

This study was done for a coalition called "Americans for Secure Retirement" and funded by Ernst & Young. The Washington Post and others reported on it yesterday.

The key finding, as reported in their press release, is that middle class Americans don't have enough money saved for retirement. And, according to the study:

"Middle-income Americans entering retirement now will have to reduce their standard of living by an average of 24 percent to minimize the likelihood of outliving their financial assets."

We guess these same middle class Boomers didn't read the McKinsey study that said if they put off retirement by a few years, the "outliving your assets" problem shrinks, if not disappears.

Probably not, because that isn't the solution offered. Instead, this coalition wants Congress to give anyone who buys an annuity a tax break on the income paid out by that annuity.

We're not sure what to make of this study and report. Not new news, as we've said before. And not a broad enough solution being offered. What middle class Boomer can afford to buy an annuity?

The public radio show Marketplace reported on this story and the reporter's last line, meant as a throw-away was "Well, I guess we could all sell the country home... [to fund retirement.]"

We don't know about you, but few middle class Boomers have "country homes." Ugh.

New Retirement Research (No, This isn't a Repeat)

This time the study is across all generations, sponsored by Charles Schwab, the financial giant, and conducted by Ken Dychtwald's Age Wave and Harris Interactive.

Called "Rethinking Retirement," it provides a comprehensive look at how all four generations -- Silent, Boomers, Generation X and Gen Y -- think and feel about "retirement."

The Web site and information in the report are very well presented and informative. But at first glance, it feels like more of the same (even if it isn't).

Over the last few years we've been telling financial services clients that consumers of all ages no longer view "retirement" as an event of short duration (10-15 years), funded by others (company pensions and Social Security). Instead, consumers today see "retirement" as a life stage lasting 25-30 years and primarily funded out of their own savings (or continuing income).

To us, then, this "rethinking retirement" isn't news at all. But there is some news in their findings. For example, the Schwab study reports that most people think "old age" begins at age 75. That ground has been covered elsewhere. But interestingly, the study asks at what age one should be able to start getting money from Social Security, and consumers say that age is much, much younger than "old age" -- it is 63. The conclusion, mentioned almost in passing, is that today consumers think the "old age" benefit of Social Security is an entitlement due 12 years before you get to "old age."

That's a key finding to us. In fact, we suspect it will be the lead in most stories about the study, if reporters are on their game. One would think that such a finding might empower politicians to address Social Security. We wish Schwab had come down hard on this particular point. It's an opportunity to get action, and it's been underplayed so far.

One aspect of the Schwab study and the Web site that we like: They are trying to move beyond reporting on research to focus now on what to do.

Chuck Schwab and daughter Carrie Schwab Pomerantz have a section on the site where they comment on the study, and the need to provide more financial literacy education in schools, as well as change the financial services industry.

These are good steps, and we encourage Schwab to keep pushing for more steps.

Our belief is that research is only good if it leads to action. Let's hope this study generates some.

A Business about Heading for the Exit

We're always on the lookout for smart entrepreneurs who have interesting ideas about tapping into the Boomer market. Here is one we like:

TheCheckoutLine.org -- a Web site offering advice on managing terminal illnesses, mostly for friends and family.

Run by Judy Bachrach, a contributing editor to Vanity Fair and former reporter for the Washington Post and other newspapers, it offers advice to help Boomers through critical issues where little support can be found.

She named her new site TheCheckoutLine because it is the one area where no one's pushing really hard to get to the front ( so true, so true).

We like the idea because it fills an important need. We aren't sure how Judy will make money at it, but maybe that isn't her goal. Yet.

Reading through some of the questions found there, and her answers, we're holding out on whether or not she'll find traction with advertisers.

Although she should be talking with the folks at LifeGem, who make man-made diamonds from the carbon remains of loved ones (we're not making this up). Imagine: "Oh, what a lovely diamond necklace, is it a family heirloom?" "You could say so. It's my grandma." Creepy.

On second thought, Judy shouldn't pursue that synergy.

The Crowded Boomer Financial Services Market

Let it be known that July 9, 2008 was the day that two large financial services firms, both starting with the letter "P," launched new tools for consumers and financial advisors related to Boomers and retirement.

Prudential launched their Retirement Workbook, "a newly designed personalized enrollment guide that delivers simplified, reader-friendly content for participants in defined contribution plans who are transitioning to Prudential Retirement or for new hires joining existing plans."

Principal Financial Group launched Retirement Readiness Reviews, a guide that helps financial professionals walk their clients through retirement planning.

The products are different, but that's hard for the average reader to discern. It just goes to show that the financial services industry has a long way to go before it is less complicated and confusing. At the very least, perhaps the next firm developing a Boomer retirement-oriented product will peer out of their window to see what the consumer sees and try to differentiate more. Please.

Boomers Skewered in the Washington Post

No wonder Boomers aren't happy these days. It's articles like this one in today's Washington Post pointing out how unhappy Boomers are that is doing it. To wit:

Perpetually restless, utterly mysterious and so very multitudinous -- 76 million -- that the rest of us are doomed to study them, analyze them, wave shiny objects around for them. ...It's all part of the frantic tap dance of figuring out how to raise boomers' tender and flagging happiness, when what we want to say is, BUCK UP ALREADY.

The reporter, Monica Hesse, according to one source, is a twentysomething up-and-comer at the Post. Her story is about the recent Pew Research study that concluded Boomers are gloomier than other generations. We have been thinking about offering up our take on the Pew findings, and will weigh in with a separate post.

Hesse had contacted us last week for a comment, but we didn't connect and she proceeded with her piece. She mentions our Boomer Consumer book -- not exactly in the best context, but we'll take the publicity.

We sent Hesse a note and told her to expect an outpouring of comments from Boomers -- mostly defensive, but also agreeing with her. The reason Boomers will respond is that they don't like being generalized and labeled. Labeling them "whiners," as Hesse does, will surely stir the pot.

Sure enough, take a look at the growing number and intensity of comments the article has generated. There are too many great ones to share here, so here's two:

What an astonishingly ageist article. It would have had more impact without the snark factor, Monica. The way you've written it, the one who comes off as immature is you.

And this one:

My, the writer seems to have "issues" with the Baby Boomers. I thought the whole point of true journalism was to at least try to keep your own attitudes out of your stories - otherwise, there is another venue. It's called an "editorial." Might I say, however, that if the writer's attitudes HAD to have been incorporated, it would have been much more efficient just to say "neener neener neener" and let it go at that. The stick-your-tongue-out immaturity would still have been conveyed.

Gotta love those Boomers. Quick to defend their turf. And predictable.

Demography is Destiny, Again

Peter Francese, founder of American Demographics magazine (now owned by Advertising Age), has a long and fact-filled story in this week's Ad Age called The Changing Face of the U.S. Consumer.

If you're a marketer, you better read it. Especially if you're under the age of 40.

That's because it will tell you the important things you need to know about the future.

It's funny, of all the prognostications we see about Boomers and the future, only one is accurate: In 2028, twenty years hence, all of those Boomers who are still with us will be between the ages of 64 and 82.

The "age wave" rolls onward.

Francese's article has far too much to summarize here. So go read it.