© 2019 Ipsos. All rights reserved. Contains Ipsos' Confidential and Proprietary information and may not be disclosed or reproduced without the prior written consent of Ipsos.

NAVIGATING THE HIGHS AND LOWS OF RETIREMENT

IPSOS AFFLUENT INTELLIGENCE:

While the onset of retirement is often a highly anticipated life event, its imminence can also bring with it feelings of uncertainty over what lies ahead. This is especially true as a new generation of retirees faces a different set of challenges, many previously unprecedented in nature – and which do not exclude the Affluent population.

Our latest Survey focused on retirement reveals actionable insights on the Retirement Affluencer and for relevant service sectors seeking to effectively target and message their value propositions to Affluents both planning to retire and those already in retirement.

There are abundant opportunities for an array of service sectors, ranging from financial services through to the travel/hospitality industry to help Affluents transition into a retirement life that feels well prepared and fulfilling. Important target groups that feature across various areas of the study include women, Millennials and Gen X.

At Ipsos Affluent Intelligence, we’re focused on helping compa-nies understand Affluent consumers (those with a HH income of $125K+) and the most influential consumers in every category (Affluencers). We’d love to help you navigate the highs and lows of your category to drive growth for your brand.

Michael Baer, SVP, Head of Audience Measurement/Ipsos Affluent Intelligence

1

What is an Affluencer?

Affluent influencers— Affluencers— drive most categories. Affluencers are enthusiastic consumers of category-related information and have disproportionately high purchase intent. They’re heavy spenders who are the first to try new offerings. And their networks depend on them for recommendations and advice. Affluencer recommendations may be the single most powerful form of communications in any category.

NAVIGATING THE HIGHS AND LOWS OF RETIREMENT

2

MEET THE RETIREMENT AFFLUENCER – A GOOD PERSON FOR THE RETIREMENT PLANNING SECTOR TO KNOW.

Before delving into some of the Study’s findings, let us introduce the Retirement Affluencer, a highly cate-gory-engaged influencer group crucial for retirement service sectors to know. Why? Because they repre-sent the ‘high-ground’ in the category– resilient, excited and both financially and psychologically prepared for retirement. Retirement Affluencers are finance savvy, but despite their finance know-how, they regularly seek professional advice and are very receptive to advertising. Some of the key demographic and psycho-graphic characteristics of these Affluencers are illustrated below:

HOW FINANCIALLY-READY DO AFFLUENTS PLANNING FOR RETIREMENT FEEL? AND HOW DOES THIS COMPARE WITH AFFLUENTS ALREADY RETIRED?

How much do Affluents who are planning to retire believe they need for retirement? The answer to this million-dollar question is much more than this idiom implies. Nearly $2.8 million is the mean amount reflect-ed across total Affluents. So, how financially prepared are Affluents for retirement? The good news is, most Affluents (65% of those planning for retirement and 88% of those already retired) have either reached or exceeded their financial goals.

Median Age Male Female Top Management Median HHNet Worth

43 67% 33% 40% $1.33M

I am arisk taker

69%

I keep up withfinancial news

87%

I am actively lookingfor financial advicefrom professionals

54%

I usually consult witha financial expert

before deciding onmoney issues

54%

Index:203Index:116

Index:187

Index:213Index: 181 Index: 168

Source: Ipsos Affluent Survey, Fall 2018

3

Loosened

Tightened

In fact, the news gets even better with the moment of truth uncovering over 4 in 5 Affluent retirees saying their budgets have either remained the same or loosened since retiring.

Base: Retired

Not Yet Retired Retired

On track to achieve financial goals

54%

Already achieved or exceeded goals

11%

Reached financial goals

54%

Exceeded financial goals

34%

Base: Not-yet-retired Base: Retired

Since you retired, has your budget...

65%

16%

19%Remained the Same

4

PSYCHOLOGICAL PREPAREDNESS – ANOTHER DIMENSION OF RETIREMENT READINESS

As for the psychological preparedness of Affluents anticipating retirement, another good news story unfolds. The majority of Affluents who have not-yet-retired indicate they are excited about retirement –this is regardless of whether they know how they plan to use their time or not. And, not surprisingly, Retirement Affluencers are even more psychologically prepared, with over three quarters of this segment indicating they are optimistic about retirement.

That said, women are more likely than men to have concerns around how they will spend their time in retire-ment – this represents more than 1 in 4 women – presenting another opportunity for a wider array of sectors (such as the likes of AARP and partner organizations across the leisure, health and insurance sectors) to reach and reassure women. As mentioned earlier, the Retirement Affluencer can help play a funda-mental role in elevating ‘happy ending’ retirement case studies, and the retirement-ready stead-fastness of this group is another example.

Psychological Preparedness for Retirement

Psychological Preparedness for Retirement by Gender

Not sure what I want to do but feel confident it will be fulfilling

I know what I want to do in retirement & looking forward to it

Not sure what I want to do & have some concerns about it

Don’t know what I’d do in retirement to keep active

Don’t expect that I’ll be able to afford to retire

32%37%

32%39%

11%7%

8%6%

2%<1%

Optimistic about retirement

Concerned about retirement

Total Retirement Affluencer

Base: Not-yet-retired

Not sure what I want to do but feel confident it will be fulfilling

I know what I want to do in retirement & looking forward to it

Not sure what I want to do & have some concerns about it

Don’t know what I’d do in retirement to keep active

Don’t expect that I’ll be able to afford to retire

36%27%

31%33%

9%13%

7%9%

2%3%

Optimistic about retirement

Concerned about retirement

Male Female

Base: Not-yet-retired

5

For service sectors targeting Affluents during their retirement planning years (from Millennials through to Boomers) there are service and/or messaging opportunities to focus on a subset of Affluents who are not feeling prepared for retirement – with finance related issues making up the main cause for their concern followed by issues around social alienation among specific Affluent demographics.

TRANSITIONING AFFLUENTS INTO RETIREMENT – OPPORTUNITIES BEYOND FINANCE SECTORS

The study’s findings also unveil sizeable marketing opportunities for sectors beyond financial/retirement planning – namely, travel/hospitality and the wellness/lifestyle sector. For those planning retirement, travel dominates across all demographics as the top-ranking activity Affluents anticipate taking part in for retire-ment.

Women skew even stronger on traveling (80% of women compared to 70% of men). Other activities worth noting include getting more exercise: Skew stronger with women (20% women compared to 14% men) Skew stronger with Boomers (24% compared to 16% Gen X and 12% Millennials).

Women feel less financially prepared and have concerns over how they will spend their time:

Generation X are concerned about running out of saved money:

Men and Millennials fear social alienation and boredom:

Boomers fear the rising medical costs/changes in healthcare:

“somewhat behind” on meeting financial retirement goals

“not sure what I want to do & have some concerns”

“Rising medical costs/changes in healthcare”

64% Boomers

40% Gen X

28% Millennials

“Running out of money”

43% Boomers

“Loneliness”

5% Boomers

12% Gen X

27% Millennials

29% Women

17% Men

13% Women

9% Men

52% Gen X

38% Millennials

“Lack of intellectual stimulation”

26% Men

16% Women

6

RETIREMENT PLANNING RESOURCES USED

A majority of Affluents are utilizing the full range of retirement planning resources available - from financial advisors, to various online resources and organizations such as AARP.

Retirement Planning Resources Used

Not surprisingly, across generations, Millennials are more likely to use self-service/online financial services whereas Boomers are more likely to use higher touch services.

Professionals Used for Retirement Planning

Recommendations from financial advisor/insurance rep

Recommendations from financial industry experts

AARP or other organizations

Articles in newspapers

Shows/programs on the radio

Books

Online financial tool/calculator

Articles on websites

Podcasts

Videos on websites

User reviews

Social Media

Shows/programs on TV

31%

21%

6%

12%

9%

5%

15%

23%

27%

6%

4%

4%

5%Base: Not-yet-retired

Full-service broker

Financial planner

Online trading

Discount broker

Registered investment advisor

CPA

Robo-advisor

26%

23%

14%

10%

9%

5%

3%

Boomer (33%)

Female, Boomer (28%)

Males, Millennials (19%, 20% respectively)

Boomer (18%)

Boomer (15%)

Boomer (5%)

Millennials(5%)Base: Not-yet-retired

Professionalorgs/advice

Above the line media

Online site/tools

Word of mouth

This is also true of higher net worth Affluents where advisor reliance increases with wealth and income level. Accordingly, just over half of total Affluents say they develop their own strategies compared to 43% of Affluents with a net worth of $1m+.

7

Reasons Would Not Use Financial Advisor

Personal Investment and Financial Strategies

For Affluents who don’t use financial advisors, the main reason is attributed to fees/cost. Reasons varied across demographic groups and included difficulty in finding someone that can be trusted (which skews male). Also, considering that Affluent men are more category-astute, it’s not surprising that anoth-er reason given for not using financial advisors was the sense that ‘I can do a better job managing my finances’.

Among reasons for not using financial advisors that skew female, relinquishing one’s money to a stranger was a key source of intimidation for Affluent women. We know from our previous studies that Affluent women keep their belongings close – as they are reluctant to readily hand over something they have worked hard to earn.

Total Affluents $250K+ HHI Net Worth $1M+Base: Not-Yet-Retired

13%

36%

51%

17%

35%

48%

16%

41%

43%

Fees & transaction costs too expensive

They may not have my best interests in mind

Difficult to find someone I trust

Intimidating to give stranger control of my money

I can do a better job managing my finances

To avoid investment scams

Portfolio not large enough to require professional

My finances aren’t complex enough

49%

39%

39%

32%

26%

26%

25%

23%

Male: 42%

Female: 36%

Male: 33%

Base: Not-Yet-Retired and develop own investment strategies

I develop my own strategies

I get guidance from a financial professional but ultimately make my own decisions

I mostly rely on recommendations from a financial professional

Provide accurate & timely reports on financial performance & recommendations on future investments

Give me upbeat reminders so I don’t lose focus

Help me with retirement calculators while taking into account my defined benefits

Show me different scenarios of how things could play out with certain investments

8

FINANCIAL SERVICES: COMMUNICATE AND STAY RELEVANT TO BRIDGE GAPS AND BUILD MORE OPPORTUNITY

Nearly half of all Affluents report that they are in ‘set it and forget it’ mode in terms of their retirement account management, with women and Gen X even more so. This poses a sizeable opportunity for the financial/retirement service sector to target women and Affluents aged 35-49 to activate portfolio check-ins and to make retirement tools more accessible, enabling a more proactive approach to portfolio reviews.

So, how can retirement planning and financial services companies better engage with customers? An open-ended question which asked Affluents what could financial institutions do to better help [them] plan for retirement, pointed to four core areas. These four areas, noted below, included suggestions to ‘commu-nicate’ and ‘stay relevant’.

Prefer to “Set & Forget”

Total Men Women Age 18-34 Age 35-49 50+

48%43%

53%47%

54%

33%

What

How

What Affluentsare Saying

Especially crucial during market volatility

Communicate Message & Tone Provide Relevant Tools

Engagement Optimizing Products

Use accessible language (especially targeting women)

Provide user-friendly tools e.g. calculators, cost of living charts & investment simulators

Offer tools to help clients keep on top of their finances

Do a better job of explaining patience with market ups & downs. Teaching the essence of dollar cost averaging

Make the process more understandable for those that are not financial wizards.

Be more down to earth in explaining financial matters

01. 02. 03. 04.

9

ENSURING A HAPPY ENDING TO THE RETIREMENT STORY

How do current Affluent retirees spend their time in retirement? And how does it compare with what Afflu-ents not-yet-retired are saying about how they anticipate spending their time? As mentioned previously, travel tops the itinerary equally for retired Affluents and not-yet-retired -at 74% for both. With exception to pursuing a second career, Affluent retirees are engaging across a wide range of activities and in higher numbers than those who have not-yet-retired expect to do. Some of the biggest differences in the retire-ment itinerary between these two Affluent groups shows that retired Affluents are much more likely than those not-yet-retired to mention relaxing, de-stressing, getting more exercise/wellness self-care, spending time with friends and working on home projects.

Activities Done by Retirees and Things Looked Forward to by Not-Yet-Retired

Interesting to note that whereas 11% of Affluents not-yet-retired mention they would be pursuing a second career in retirement, only 5% of current Affluent retirees are doing this. Bear in mind that this is not a longitu-dinal study so these differences could in-fact be reflecting how retirement will be redefined going forward as Gen X and generations thereafter could be facing unprecedented retirement challenges such as longevi-ty, stock market volatility, diminishing pensions and possible increases in healthcare costs.

Furthermore, the higher anxiety seen amongst Gen X may be further compounded by the imminence of retirement for a generation that has, in its working lifetime, experienced two crippling recessions. Thus, the need to continue working through retirement years (or at least an expectation they may need to) will re-shape the nature of retirement. And with this comes the added uncertainty of an employment model that is moving more and more toward a gig economy where benefits and steady pay may no longer be the norm. These issues are crucial for the retirement planning sector to embrace in innovating on products and services that address these new challenges.

Traveling more

Relaxing/less stress

Spending more time with my family

Getting more exercise

Enjoying a hobby

Taking better care of myself

Spending more time wiht friends

Working on home projects

Volunteering

Continuing education/attending classes

Pursuing a second ‘career’

Not Yet Retired Retired

74%74%

55%69%

48%56%

16%54%

37%47%

10%45%

11%44%

7%43%

14%37%

5%12%

11%5%

10

On a final and positive note - contrary to concerns cited by the women who have not-yet-retired and are uncertain on how time will be spent, retired Affluent women are keeping extremely busy and, in fact, are fully embracing retirement. Affluent retired women are doing far more travel than male retirees, volunteering more and getting more exercise than Affluent men who have retired.

These help form a collection of good news stories around Affluent retirement which also translate to mes-saging and acquisition opportunities for sectors that include both retirement planning and those beyond - such as travel/leisure and wellness.

Activities now that you are retired:

Travelling Exercise Volunteering

RetiredWomen89%

RetiredMen

65%vs.RetiredWomen62%

RetiredMen

49%vs.RetiredWomen42%

RetiredMen

34%vs.

Spending more time with my family

Taking better care of myself

Working on home projects

Continuing education/attending class

Pursuing a second ‘career’

52%61%

42%50%

41%

46%

11%

15%

4%

7%

Male FemaleBase: Retired

ABOUT IPSOS AFFLUENT SURVEY USA

Ipsos Affluent Intelligence began our Affluent study over 40 years ago because we understood that Afflu-ents are one of the most powerful and influential target audiences across all industries, driving revenue, adoption of new technologies and experiences, and influencing purchases among their peers and network.

Affluents control the lion’s share of U.S. household net worth and outspend non-Affluents in virtually every category. Consequently, marketers of everything from automobiles to watches, technology to media, and entertainment to travel rely on capturing both the share of wallet and share of mind of this critically import-ant group.

For the purposes of this White Paper, the definition of Affluents is adults aged 18 and over, living in house-holds with at least $125,000 in annual household income. Data presented here are from the Fall 2018 Ipsos Affluent Survey USA, which consists of online interviews of 24,687 respondents and a Q4 2019 re-contact of 1,000 IAS respondents.

For more information:http://www.Ipsos-na.com/go/affluentsurveyhttp://www.twitter.com/affluentintelMichael.Baer@ipsos.comIpsosAffluentIntelligence@ipsos.com

6 © 2019 Ipsos. All rights reserved. Contains Ipsos' Confidential and Proprietary information and may not be disclosed or reproduced without the prior written consent of Ipsos.