LOMBARD, Ill.—Another expert is advising FIs not to overlook Baby Boomers in the rush to focus on Millennials.
Lynne Cornelison, research analyst at Raddon Financial Group, pointed to the company’s recent study of high-income financial behavior, which found an examination of consumers with an annual income of $125,000 or higher lays the foundation for opportunity among Baby Boomers.
“High-income consumers are not a homogeneous group; they exhibit unique financial behaviors. Although they may be categorized as affluent, their channel preferences, saving and investing habits, and debt levels vary widely. The conventional wisdom is that higher earners are more prepared than other retiree classes for retirement, having saved more and dwindled down debt. This is true for some, but not for all,” said Cornelison in the latest issue of the Raddon Report.
The study shows Baby Boomer ranked saving money for retirement, having extra funds for emergency purposes, and reducing taxes on savings and investments as their top three financial priorities. When asked about their comfort level in making investment decisions, 32% of Boomers said they prefer to receive advice on where to invest the majority of their money, and an additional 28% indicated they would be open to receive advice on where to invest some of their money.
In addition, findings show 67% Boomers are extremely or very concerned with knowing how much money they’ll need to retire and maintain their quality of life in retirement, and 58% are concerned about reducing debt levels prior to entering their retirement years.
“Clearly, engagement opportunities exist among Baby Boomers,” Cornelison said noting that high-income consumers may be more willing to take on higher debt levels, due to higher paying jobs or more financial resources.
She said financial institutions may want to consider offering streamlined solutions in debt consolidation and payment methods for Boomers.
“Looking at current loan balances, including mortgages, consumer loans, and credit card balances, approximately four in 10 high-income Baby Boomers have debt levels greater than $100,000. At this stage in their lives, there is a greater demand for debt management, particularly for those who want to retire without debt burdens,” she said. “Servicing their diverse financial areas of need, such as asset growth, wealth/estate planning, debt reduction, and retirement readiness will contribute to the depth of relationship the financial institution has with their client.”