Cerulli has announced the key findings from its research in the 2Q Issue of The Cerulli Edge–Retirement Edition. Highlights include:
In this Segmenting Baby Boomers Issue Cerulli examines the need to segment Boomers, striving to provide a framework for financial institutions of all types that enables them to effectively address the investment, savings, and income needs of this unusual demographic group. Its also provides analysis, not only of the financial products and services currently aimed at the Baby Boomer generation, but also of opportunities thatwhile potentially beneficial (for both financial services firms and Boomers)have not yet gained traction. The Quantitative Update section provides proprietary data on retirement industry trends, including expanded rankings of IRA providersfeaturing the top 15 firms.
Cerulli analysts contend that it is important to segment Boomers at least by two age groups (older Boomers born 1946-1955 and younger Boomers born 1956-1964), developing a narrower lens with which to properly analyze the financial products and services most applicable to each group. In doing so, glaring differences present themselves.
The looming wave of retirements of older Boomers has lit a fire under corporations to limit their growing DB exposure by exercising the option to freeze and pare down the benefits of their plans. Cerulli notes that only 5% of Fortune 1000 DB plans had been frozen or terminated in 2002, compared with 22% in 2007.
Forty-four percent of second-wave Boomers are at risk of not saving enough for retirement, compared with 35% of first-wave Boomers, according to Boston College. Additionally, nearly one-third of 401(k) participants in their 40s are not receiving a full company match, according to Financial Engines.