A huge number of America’s 76 million baby boomers fall into the “Overwhelmed” category when it comes to retirement – they’re worried that they won’t be able to afford the lifestyle they want and they’re not sure how to improve their prospects. That’s just one of the conclusions drawn from the Reclaiming the Future Study* conducted by Allianz Life Insurance Company of North America (Allianz Life®).
Based on its survey of more than 3,200 Americans, Allianz Life has identified five distinct boomer financial personalities, each with different needs as they approach retirement. Nearly one-third of respondents fell into the “Overwhelmed” category, reporting that they are unprepared for retirement and lack confidence in planning for retirement. The other personality types derived from the study are Iconic, Resilient, Distracted and Savvy.
“These personalities can be extremely useful for boomers, helping them to identify with peers and letting them know they are not alone,” said Katie Libbe , vice president of Consumer Marketing and Solutions for Allianz Life. “Realizing that there are others who share the same concerns is an important step for boomers in their retirement planning process – whether that leads them to reevaluate their current strategy or connect with a financial professional for the first time.”
Allianz Life’s Reclaiming the Future study polled 3,247 Americans, ages 44-75, with a minimum household income of $30,000. Via a statistical technique called cluster analysis, consumer segments were identified based on attitudinal, behavioral, psychographic and demographic characteristics. Five distinct financial personalities emerged as the respondents’ demographic data were analyzed and correlated with their responses about economic resilience, concerns, attitudes and financial needs.
A Closer Look at the Five Personalities
Overwhelmed – 32 percent of respondents?The largest segment of respondents, “Overwhelmeds” feel unprepared for retirement and lack confidence in their ability to put together a strategy for their financial needs in retirement. They have the highest level of credit card debt and low asset levels. They are depending heavily on Social Security for their retirement.
Resilient – 27 percent of respondents?Pragmatic and grounded, this group was hit hard psychologically during the recession. “Resilients” have finally woken up and now recognize the need for better planning – while also restoring their battered portfolios. They are most concerned with outliving their income and realize they may have to work longer than expected to achieve retirement goals.
Iconic – 20 percent of respondents?“Iconics” can be thought of as “role models” – “true blue” retired Americans who’ve worked hard and lived within their means. They’re middle class, live mostly on a pension, and are extremely disciplined and traditional in their viewpoints and values. “Iconics” may have reduced some of their spending recently, but they have a clear understanding of their retirement expenses.
Savvy – 14 percent of respondents?Those in the “Savvy” category are financially sophisticated, affluent boomers who pride themselves on having prepared well for retirement and being informed about most financial concepts. This group is living comfortably in retirement and appears to be the best-prepared of the five personalities. They are financially independent and comfortable taking risks.
Distracted – 7 percent of respondents?The youngest of the segments, “Distracteds” are caught up in the complexity of modern life and tend not to focus on planning for retirement. They have the highest income of any segment and tend to spend freely – with family and home expenditures taking priority over saving for retirement. Although they have substantial assets, they may still be worried that their savings won’t be adequate for retirement and have no real plan for growing those savings.
“Despite recent financial turmoil that may have negatively affected their retirement savings, a key takeaway from our research is that a majority of boomers now understand the role that guaranteed lifetime income can play in their retirement strategy,” added Libbe.
For more detail on each of the five personalities and a series of videos that bring those personalities to life, visit www.allianzlife.com/reclaim.