Advisors have long known about the core financial issues of interest to boomers nearing retirement: how to fund health care needs, meet basic living expenses, travel the world, and so on. But they may not be quite so knowledgeable about boomers' fears of losing social connections or their desire to make their kids more financially astute.
Such concerns were expressed in large numbers among boomers polled by Ameriprise Financial, Minneapolis, Minn., which this month released a study that explores people's attitudes, worries, behaviors, ambitions and needs before and after retirement. Ameriprise conducted the survey, "The New Retirement Mindscape," in conjunction with the market research firm Harris Interactive, Rochester, N.Y.
"What most people look forward to about retirement is the freedom it will afford them–both financially and in terms of having the time to do the things they want," says Craig Brimhall, vice president of retirement wealth strategies at Ameriprise Financial. "That's no surprise. What did surprise us is the loss of social connectedness that many feel upon reaching retirement. People have to prepare for having a different social network."
Of the 883 pre-retirees who responded to Ameriprise's August 2005 telephone survey (which polled 2,000 U.S. adults), 13% cited "loss of social connections at work" as the hardest thing they expect to deal with in retirement. That statistic rises to 22% among retirees, including the leading edge of boomers now transitioning to retirement.
Other challenges, to be sure, fixated the attention of greater percentages of respondents. These include "concerns about health insurance" (41% of pre-retirees and 21% of retirees) and "loss of income from a primary career" (23% and 24%, respectively).
Also surprising to the survey's authors was the high percentage (52%) of respondents who cited "advice to help your children become financially savvy" as the most valuable financial planning service an advisor could provide. The next three most important services included: "help sorting through health care and social service options" (48%); "help to make sense of Social Security or employer pensions" (48%); and help dealing with inheritance and legacy matters" (30%).
Concerns about financial immaturity, says Brimhall, are reflected in the high percentage of "boomerang kids" who return to their parents' home in the immediate years following college graduation. The U.S. Census Bureau reports a 70% increase between 2000 and 2004 in kids over the age of 18 living with their parents.
"Parents don't want kids to be a financial drain on their retirement plans," says Brimhall. "When I ask advisors in training sessions how many have clients who are bailing out their kids, almost everyone raises their hand. This is a big issue–probably bigger than we realize."
The Ameriprise survey revealed five stages of progression leading into retirement: "imagination," "anticipation," "liberation," "reorientation" and "reconciliation." Most boomers fall into the first two categories, periods that encompass from 15 to six years before retirement (imagination) and up to five years (anticipation) prior to retirement.
