descending the corporate ladder
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Top 10 Myths Surrounding Aging Baby Boomers & What Boomers Need From Employers. Descending the Corporate Ladder. The State of the Aging Baby Boomer Market – Canada – 2006 Sam Cukierman Managing Partner Strategic Guidance Consulting Inc. Research Sponsors: DeGroote School of Business - PowerPoint PPT PresentationTRANSCRIPT
Strategic Guidance Consulting Inc.All rights reserved Market Research – The Aging Baby Boomer – Canada 2006
Descending the Corporate Ladder
Top 10 Myths Surrounding Aging Top 10 Myths Surrounding Aging Baby BoomersBaby Boomers
&&
What Boomers Need From What Boomers Need From EmployersEmployers
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The State of the Aging Baby BoomerThe State of the Aging Baby BoomerMarket – Canada – 2006Market – Canada – 2006
Sam CukiermanSam CukiermanManaging PartnerManaging Partner
Strategic Guidance Consulting Inc.Strategic Guidance Consulting Inc.
Research Sponsors:Research Sponsors:DeGroote School of BusinessDeGroote School of Business
Verity International LimitedVerity International Limited
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Research for building loyalty to capture this market segment
Survey sample:Survey sample: 1,000 Canadians aged 47 – 64, Working full-time, (company or self-employed) Weighted by age, gender, and marital status (to
reflect Canadian demographics consistent with 2004 Statistics Canada data).
Survey was conducted in November 2005. Survey was conducted in November 2005. Sample accurately reflects the views of the
target group, within 3.1 percentage points 19 times out of 20.
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Age and Marital Status Age Distribution
26%
37%
25%
12%
47-49
50-54
55-59
60-64
Marital Status
68%
23%
9%
Married
Widowed, Divorced, Separated
Single
Income / Net Worth Household Income
32%
26%
18%
15%
9%
<$50,000
$50K - $74K
$75K - $99K
>$100,000
No Response
Net Worth
27%
21%16%
13%
23%
<$100,000
$100K - $249K
$250K - $499K
>$500,000
No Response
Research for building loyalty to capture this market segment
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Myth #1Boomers will retire, find their place in the
sun, and live happily ever after
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Boomers will retire, find their place in the sun, and live happily ever after
Facts:
The word retirement is a misnomer – it is not a point in time – it’s a lifestyle
The lifestyle will engage boomers in work
More than half of Aging Baby Boomers plan to continue working on a part-time basis after they “retire”
Myth #1Myth #1
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At Desired Retirement Age I Will ...
8%
52%
18%
22%
Continue working on a full- time basis
No longer work
Not sure / don't know
Continue working on a part- time basis
By Age
55%
52%
52%
50%
47-49
50-54
55-59
60-64
By Net Worth
53%
50%
50%
59%
<$100,000
$100K - $249K
$250K - $499K
>$500,000
… Continue Working On Part-Time Basis.
Boomers will retire, find their place in the sun, and live happily ever afterMyth #1Myth #1
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At retirement I expect to need ...
49%
37%
7%7%
Less monthly income than today
About same monthly income as today
More monthly income than today
Don't Know
Boomers will retire, find their place in the sun, and live happily ever after
… and their needs for monthly income will be about the same as they spend today
… to spend money on themselves as a reward for a lifetime of hard work, on travel, on hobbies, on helping their children
Myth #1Myth #1
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Boomers will retire, find their place in the sun, and live happily ever after
How many years of retirement income do you How many years of retirement income do you think you will require after retirement?think you will require after retirement?
This has implications for the social fabric of our society – with great This has implications for the social fabric of our society – with great influx of boomers wishing to work, where are the jobs? How will influx of boomers wishing to work, where are the jobs? How will employers respond to meet boomer expectations (realistic or employers respond to meet boomer expectations (realistic or unrealistic)?unrealistic)?
Net Worth
Total <$100K $500K or more
Less than 5 years 2% 3% 1%
5-10 years 10% 15% 4%
11-15 years 17% 20% 15%
More than 15 years 50% 42% 64%
Don’t know 21% 20% 16%
Myth #1Myth #1
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Myth #2 Aging baby boomers are financially
prepared for retirement today
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Aging baby boomers are financially prepared for retirement today
Facts:
They are not financially prepared
85% of aging baby boomers feel only somewhat prepared, not at all prepared, or simply do not know
Myth #2Myth #2
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Financial Preparation For Retirement
15%
61%
21%
3%
Somewhat prepared
Not at all prepared
Don't know Very prepared
All Those Continuing To Work
32%
29%
39%
With your current company
With a different company
Don't know
Self-Employed Continuing To Work
60%12%
28%
Aging baby boomers are financially prepared for retirement todayMyth #2Myth #2
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Myth #3Baby boomers access advice and information
and place their trust in one advisor
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Baby boomers access advice and information and place their trust in one advisor
Facts: 76% of baby boomers have started to “plan” for
retirement They begin with self-help modes of advice –
websites, books, friends and family – and find the degree of helpfulness lacking
They progress to more credible professional sources of advice for planning; progression is slow and there is considerable room for growth
Myth #3Myth #3
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Which of the following people / resources have you talked to or consulted with regarding your retirement planning? – note HR resource ranks 7th
2%
5%
6%
7%
7%
14%
15%
18%
18%
27%
31%
31%
34%
Career counseling firm
Real estate agent
Lawyer
Someone in government
Broker
Accountant
Human resource person at place of employment
Financial institution manager / acct. manager
Life insurance agent
Independent financial planner
Books, articles, newspapers
Family member / friend / colleague
Financial planner with financial institution
Baby boomers access advice and information and place their trust in one advisor
Financial planners are the predominant source of advice – financial planners in banks, trusts, and credit unions get highest usage scores
Myth #3Myth #3
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Baby boomers access advice and information and place their trust in one advisor
The degree of helpfulness varies among advice providers - among those who have sought professional advice, independent financial planners rank highest in degree of helpfulness
Those who use accountants (only 14%) rank them as high as financial planners for helpfulness
Myth #3Myth #3
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Degree of Helpfulness
52%
56%
57%
59%
59%
61%
64%
67%
67%
70%
71%
76%
76%
81%
19%
25%
16%
16%
19%
18%
27%
15%
14%
19%
25%
22%
21%
33%
Life Insurance Agent
Career Counselling Firm
Real Estate Agent
Family / friend / colleague
Web sites
Books / articles / magazines
Lawyer
Broker
Someone in Government
F.I. / Account Manager
HR & Workplace
Accountant
Financial Planner with F.I.
Independent Financial Planner
Extremely Helpful
Extremely + Very Helpful
Baby boomers access advice and information and place their trust in one advisorMyth #3Myth #3
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Myth #4The 4 traditional cornerstones for retirement - savings, health, life insurance, and investment
plans - are well-covered
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The 4 traditional cornerstones for retirement - savings, health, life insurance,
and investment plans - are well-covered
Facts:
Life insurance and RRSPs dominate financial holdings
Significant opportunities for growth exist in health, disability and critical care insurance and estate planning
Myth #4Myth #4
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Assets Currently Held by Aging Baby Boomers
7%
10%
16%
21%
24%
27%
39%*
40%*
48%
57%
59%*
64%*
68%
77%*
Registered Retirement Income Fund (RRIF)
Estate plan
GIC outside of RRSP
Power of attorney
Mutual funds outside of RRSP
Stocks / bonds outside of RRSP
Critical care insurance
Long term care insurance
Company pension plan
Will
Disability insurance
Health insurance
Registered Retirement Savings Plan (RRSP)
Life insurance
Insurance Coverage *
23%
47%
42%
5%
6%
24%
13%
10%
17%
15%
30%
4%
7%
18%
18%
Life
Health
Disability
Long term care
Critical care
Through Work Only
Acquired Personally
Both
39%
77%
59%
64%
40%
The 4 traditional cornerstones for retirement -savings, health, life insurance,
and investment plans - are well-coveredMyth #4Myth #4
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Myth #5Enormous generational wealth transfer through
inheritances are occurring or will occur
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Facts:
Enormous generational wealth transfer through inheritances are occurring or will occur
Facts: Only 11% of aging baby boomers have inherited any
kind of assets in the past 5 years
55% of aging baby boomers do not anticipate inheriting any assets in the next 10 years – this holds true even for those aged 60-64
26% do anticipate inheriting some wealth bequeathed by an estate, but this will not occur until their very late sixties / early seventies
Myth #5Myth #5
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Have you inherited assets from an estate that was bequeathed to you in the past five years?
In the next ten years or so, do you anticipate inheriting assets from an estate?
11%
89%
Yes
No
26%
55%
19% Yes
No
Don’t Know
19%
29%32% 35%
<$100,000 $100K - $249K $250K - $499K >$500,000
By Net Worth
Enormous generational wealth transfer through inheritances are occurring or will occurMyth #5Myth #5
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Enormous generational wealth transfer through inheritances are occurring or will occur
Does this make sense? Yes because…
They are spending money to help their children financially and will do so for the next 10 years
Only after age 64 do the number of children that are financially independent exceed the number of children receiving financial help
They expect to live well into their eighties, remain mentally and physically active, and be vigorous consumers, believing the monthly income requirements will be at least the same as what they spend today
Myth #5Myth #5
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Respondents with children47-49 50-54 55-59 60-64
Provide financial help to children 79% 89% 76% 77% 47%
Children financially independent 21% 11% 24% 23% 53%
ALLBy Age Group
Enormous generational wealth transfer through inheritances are occurring or will occurMyth #5Myth #5
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Myth #6Company human resources functions are doing
a good job helping future outgoing boomers when they leave their full time jobs
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Company human resources functions are doing a good job helping future outgoing
boomers when they leave their full time jobs
Facts:
Human resource management for career planning and advice is weak – research anecdotes from personal one-on-one interviews backed by quantifiable results
Career management consulting firms can fill the gap if company HR function is unable to fulfill boomer needs
Myth #6Myth #6
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Company human resources functions are doing a good job helping future outgoing
boomers when they leave their full time jobs
What benefits will you be entitled to receive?
Health care benefits 77%
Dental benefits 60%
Insurance 58%
Other 7%
Don't know 1%
31%
53%
16%Don’t Know
No
Yes
When you retire, will you be entitled to receive any continued benefits from your existing employer?
Myth #6Myth #6
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Company human resources functions are doing a good job helping future outgoing
boomers when they leave their full time jobs
Importance of Topic in Retirement Planning
- Very Important / Somewhat Important Rating-
43%
47%
49%
59%
60%
64%
72%
74%
81%
92%
Offering outside consulting / counseling
Seeking new career choices after retirement
Evaluating personal strengths for new career choices
Advice on adjusting to retirement
Suggestions for new activities to be involved in
Prepare you in event of early retirement
Understanding what to expect in retirement
Financial counseling
Legal matters (wills, power of attorney)
Benefits you will be entitled to
Myth #6Myth #6
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Myth #7After retirement, baby boomers will move,
downsize their homes, and live out-of-country
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After retirement, baby boomers will move, downsize their homes, and live out-of-country
Facts:
Two thirds of aging baby boomers will stay in their current residence
Only 20% of aging baby boomers will live any part of their retirement outside of Canada
Myth #7Myth #7
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After retirement, baby boomers will move, downsize their homes, and live out-of-country
<1%
1%
4%
9%
13%
73%
United States
Somewhere other thanCanada or U.S.
Different province in Canada
Don't know
Different city / town/area in same province
City / town / areawhere currently reside
Which of the following best describes where your main residence will be when you retire?
Plan on Living Any Part of Retirement Outside Canada
Yes20%
No80%
- Where ?-
Asia, Australia,Other
7%
14%
18%
21%
52%
South America
Europe
Caribbean
United States
Myth #7Myth #7
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Myth #8When the boomer works less they will do less
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When the boomer works less they will do less
Facts:
Aside from part-time work, caring for physical appearance, exercise, travel, cooking, home renovations, gardening, charity and volunteer work will dominate retirement time
Standard of living, CPP availability, medical and dental affordability are key issues
Myth #8Myth #8
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When the boomer works less they will do less
Walking 75% 86% 11%Travelling 43% 68% 25%Cooking 57% 68% 11%Volunteering 30% 62% 32%Gardening 50% 61% 11%Home renovation / repairs 46% 49% 3%Charity work 17% 38% 21%Home decoration / décor 28% 34% 6%Photography / art 25% 34% 9%Exercise classes 14% 33% 19%
Golf 21% 32% 11%
Wine tasting 15% 22% 7%
Knitting / sewing 18% 21% 3%
Sitting on board of directors (paid or unpaid) 13% 20% 7%
Weight training 15% 19% 4%
Social club member 10% 18% 8%
Religious classes / committees /services 12% 16% 4%
Social work 6% 12% 6%
Running 8% 9% 1%
Sailing 3% 6% 3%
Tennis 4% 5% 1%
Current Activities - Do / Plan To Do When RetireCurrently
DoPlan To
Do *%
Change
* includes those who currently do and those who plan to do after they retire.
Myth #8Myth #8
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Myth #9Boomers are not web savvy – their thirst for
information will dry up
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Boomers are not web savvy – their thirst for information will dry up
Facts: Boomers want a website dedicated to their needs
Three out of every four (74%) aging baby boomers indicated they would definitely / probably be interested in accessing a website specifically geared to serve their needs. This is consistent across all age, income and net worth groupings
(Note: This survey was conducted on line. Results of data presented in this section may contain some bias given the respondent’s predisposition to a comfort level with the web).
Myth #9Myth #9
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Boomers are not web savvy - their thirst for information will dry up
Respondents interested in accessing website (definitely / probably) for ...
42%46%47%
50%61%61%
63%63%65%66%68%70%
74%74%75%
78%81%81%82%82%
84%85%
88%
Art and collectibles
Recreation products
Automobile sales
Municipal or other political issues
Clothing for sale
Automobile service
Employment opportunities
Hardware products
Home renovation / repair services
Volunteer opportunities
Consumer electronics
Financial services
Dining recommendations
Health and fitness products / services
Computer products / services
Travel specials
Books
Hobbies
Food preparation / recipe information
Food products
General newsletter
Medical services
Entertainment discounts
“Top Ten”
Myth #9Myth #9
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Myth #10THE BIGGEST MYTH OF ALL – we’ve identified this group; we’ve got our strategic plans lined
up; we’re meeting the aging baby boomers’ needs today
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We’ve identified this group; we’ve got our strategic plans lined up; we’re meeting the
aging baby boomers’ needs today
Facts: Everyone wants the business of this “brick-
rich / cash rich” group
Few are meeting their expectations today
Opportunity abounds
Myth #10Myth #10
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We’ve identified this group; we’ve got our strategic plans lined up; we’re meeting the
aging baby boomers’ needs today
ALL RESPONDENTSAbove
AverageAverage
Below Average
Don't Know
Pharmacies 31% 57% 8% 4%Vacation destinations 27% 54% 9% 10%Seniors clubs / associations 25% 48% 7% 20%Book stores /sellers 20% 64% 7% 9%Specialty magazines / books 20% 60% 8% 12%Specialty food stores 19% 58% 10% 13%Restaurants 19% 67% 9% 4%Doctors 19% 58% 20% 4%Health / fitness clubs / gyms 18% 53% 16% 14%Pharmaceutical companies 18% 56% 19% 7%Travel agents 18% 58% 10% 14%Hotels 17% 65% 9% 9%
Ranked in order of “above average” in meeting the needs of aging baby boomers, the following “top 12” businesses, services or professions are shown:
Myth #10Myth #10
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We’ve identified this group; we’ve got our strategic plans lined up; we’re meeting the
aging baby boomers’ needs today
FINANCIAL SERVICES - ALL RESPONDENTS
Above Average
AverageBelow
AverageDon't Know
Financial planners associated with specific financial institution 16% 57% 12% 15%
Independent financial planning 14% 60% 11% 15%
Banks 14% 59% 22% 5%
Credit unions 13% 53% 12% 22%
Mutual fund companies 12% 57% 14% 17%
Life insurance companies 11% 61% 18% 10%
Financial services industry falls into a middle category among the forty businesses, services, and professions surveyed :
Myth #10Myth #10
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We’ve identified this group; we’ve got our strategic plans lined up; we’re meeting the
aging baby boomers’ needs today
ALL RESPONDENTSAbove
AverageAverage
Below Average
Don't Know
Gasoline companies 3% 33% 56% 8%Provincial government 4% 40% 50% 7%Federal government 3% 41% 49% 6%Municipal government 4% 47% 43% 7%Retirement homes 15% 44% 25% 17%Automobile dealers 7% 58% 24% 11%Automobile manufacturers 8% 59% 23% 10%Airlines 8% 57% 23% 12%Home builders 7% 57% 23% 14%Banks 14% 59% 22% 5%
The businesses ranked most negatively – the percentage aging baby boomers who believe their needs are met on a “below average” basis :
Myth #10Myth #10
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KEY IMPLICATIONS
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Key Implications
Life expectancy and expectancy for what life offers are high – catch the wave
Health conscious and confident – focus on wellness
Spenders – careful, and demanding a value proposition that makes sense
Branding is key – talk to them in their language – keep it simple - deliver messages from respected sources through an attention span that filters what they see, find credible and believable
Ethics will grow in importance
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Key Implications
Be innovative – create a value proposition on your own, or seek strategic alliances that twin those who are serving boomers well with those who need to break through and profit from this market segment
Case histories: AMEX / insurance; the GAP / Forth and Towne; Vespa / homebuilders; Shoppers Home Health / TEMPUR; Kellogg / Smart Start pedometer; Dove / Mirrors; Proctor and Gamble / make-up selling “hope”; Honda, Lexus, Chrysler
BIG GROWTH: estate planning; health insurance; cooking, specialty foods; wellness; account management cross- sell ratios