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Demographics & Culture
High net worth boomers: Settling into retirement
Mike Van Wyk
October 28, 2018
Your Boomer clients are feeling good about their retirement. But a few worries keep them up at night.
Mike Van Wyk, Capital Group’s vice president of Customer Research & Insights, shared new research on the unique generational needs of high net worth clients. During his presentation, titled "Millennials to Boomers: Better high net worth planning by generation,” Van Wyk revealed data on Boomers and corresponding actions advisors might consider to serve them best.
Snapshot
- Over nine out of 10 Boomers know they are Boomers
- Surprisingly, only about a third of Boomers say they are unique as a generation
- But Boomers do think their generation has uniquely traditional values (59%), respectfulness (53%) and work ethic (72%)
They are…
Happy with retirement
- 60% say retirement is better than they expected (30% said it’s the same as expected)
- Three quarters of Boomers say their financial situation is as good or better than expected
Worried about shocks to their retirement
- Many fret over shocks in the cost of health and taxes. Higher-than-expected health care costs hit 40% of Boomers.
Boomers: Experienced with change
Boomer persona: Retirement came earlier than expected.
Retired Boomers say retirement is even better than they thought it would be and their financial situation is rosier than they expected. Many Boomers retired earlier than they planned for various reasons. But they’re OK with that.
Boomers, though, do have some sleep loss issues. Many worry about the threat of unexpected costs, especially with health care, long-term care and taxes. Mitigating such risks to a comfortable retirement is a top goal. This generation has lived through several market cycles and understands the power of long-term planning.
Boomer action plan for advisors: Manage the unexpected.
Prep them for surprises. As pointed out above, retirement doesn’t come on time for most Boomers. About a third retire earlier than expected because they are financially ready. For the rest, early retirement came due to health issues, job changes or a family situation.
Help them transition. Earlier-than-expected retirement can be effectively navigated with advice. Boomers are looking for help.
Get up to speed on health care. Evolve your knowledge to include health care issues. Health care costs are higher than expected for 40% of Boomers. Another 40% will be caregivers for family members at some point during retirement.
Gino Perrina
Chief Investment Officer of Laird Norton Wealth Management
Video
Boomers Setting Expectations
Gino Perrina:
So, for us, many of our boomer clients are retired. And mm by and large feel comfortable with where they are. Um, they certainly are concerned about the potential of a downturn, but we explain to them, how, how their portfolios can withstand a downturn. I think the biggest concern for bloomers like it is for any generation is, um, the potential for lower expected returns over the, the next three to five years.
And sometimes you have to have those difficult conversations with clients to set expectations appropriately. Um, that's true of boomers as it is with, with anybody else.
I think boomers, um, probably more so than other generations prefer, uh, frequent in person, uh, communication whether that be via phone or, um, live, in, in our offices or in theirs, um, more so than, than other generations.
Gino Perrina, Chief Investment Officer of Laird Norton Wealth Management, discusses his firm’s experiences working with Boomer clients.
More in this series about HNW generations
High net worth Millennials: Savvy with high expectations
High net worth Gen Xers: “Do-it-yourself” generation
HNW generations: By the numbers
An at-a-glance look at data that define your clients’ generations
HNW generations: Action plan
Enhance your effectiveness as an advisor by understanding your clients’ generation
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More about high net worth:
3 secrets of high net worth clients revealed
High net worth will soon look very different
Survey: What high net worth clients want
Sources
Capital Group Advisor Generational Attitudes Study, September 2018
Capital Group Investor Generational Attitudes Study, August 2018
Capital Group Wisdom of Experience Survey, December 2017
McKinsey Money in Motion Survey, 2016
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