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Retirement Dreamers Segment Summary March 2013

Source: 2012–13 MacroMonitor

Baby Boomer–headed households (1946–64) constitute slightly more than one-third of all US households: 44 million. Roughly one in five are retired; of the remainder, nearly four in five are within 15 years and 20% are within 5 years of retirement. However, three out of five Boomer households have less than $100,000 in total financial assets (see the March 2013 MacroMonitor Market Trends newsletter). For these 26 million Boomer households with modest financial assets, insufficient time remains to accumulate enough assets for a traditional retirement. For them, retirement is a dream.


Retirement Dreamers are constrained by their relative lack of education and income. Slightly more than one-third are female-headed households.

  • The mean age of the household head is 57.
  • Some 70%, in comparison with 30% of all US households, earn less than $50K annually.
  • Only 15% have a four-year college degree.
  • Some 40% are married whereas 70% of households with financial assets of $100K or more are married.
  • They are less likely than all households to have dependent children younger than age 18 but more likely to have Boomerang Kids (17%) and dependent adults (26%).
  • Some 30% are not retired and are not preparing to do so.
  • Slightly more than half live in a single-family home; they are much less likely to own a home than are wealthier Boomers.
  • Roughly half live in rural city or town or a rural area.

Products and Services and Financials

The relatively low income of Retirement Dreamers results in basic financial-product-and-service ownership. Focused on meeting their day-to-day needs, they have little money to save or invest.

  • In 2011, 27% did not file a federal income-tax return.
  • They are below the overall averages for owning most financial products; overall they own an average of 15.5 products per household.
  • However, they are just as likely as all households to have checking accounts, vehicle and consumer loans, and outstanding credit-card balances.
  • For retirement income, 75% say they will rely on Social Security.
  • To control spending, the majority prefer debit-card to credit-card use.
  • Dreamers have a mean of $19.5K in tangible assets and a net worth of $115.6K, in comparison with $371K for all US households.
  • They are less likely (20%) than all households (28%) or than households with more than $100K in total assets (51%) to have a will.
  • They have an average of $30K in retirement products and $64K in investment accounts—significantly less than other households have.
  • They favor banks and insurance companies as their primary financial institution.

Financial Attitudes That Differentiate Retirement Dreamers

The majority of Retirement Dreamers lack not only the money and ability to save and invest; they also lack the confidence to do so.

  • Three in five households are worried about just keeping up; getting ahead seems outside the realm of possibility.
  • Most are unsure if the financial decisions they make are the "right" ones.
  • Over half "don't know" the most important factor in determining their household's savings and investments—probably because they can't afford to do either.
  • The majority worry about problems their debt would cause others in the event of job loss or death; they also worry they won't be able to secure a loan if necessary.
  • Half worry about the safety of their deposits, even though their deposits do not exceed FDIC insurance; many may remember being burned in the S&L debacle.
  • They prefer locally owned institutions where they already have a relationship.
  • Almost four in five worry they are not saving enough, but they are the least likely to want savings automatically deducted from their income.
  • They are half as likely as households with more than $100K in assets to feel comfortable in doing financial business on the internet and less likely than all households to use the internet for any financial services.

Interesting Tidbits

Over-half of Retirement Dreamers are not very—or not at all—confident of achieving their major financial goals. Half are struggling to make ends meet; only one-third report they are financially stable at the moment.

  • Half of Retirement Dreamers have no financial strategy.
  • Only one-quarter are focused on retirement as their top savings and investments goal; almost two in five have no savings and investments goals.
  • Two-thirds are concerned about how to live in retirement on a fixed income.
  • Fewer than one-third receive any financial information through traditional or new media; only 13% rely on friends, relatives, or associates—the highest incidence for any financial-information source.
  • Slightly more than half are not interested in learning more about any financial topics; information about how to write a will (18%) and information about how much life insurance is "right" (13%) have the highest incidences.


Retirement Dreamers are not the high-profit customers many financial providers desire, but 26 million households do represent a business opportunity. Dreamers use basic financial products and services and are—and will remain—loyal customers. Realists, many understand they may never be able to retire; most are pragmatic enough to recognize that they will end their lives in diminished circumstances; the remainder will live with great insecurity. Although few are likely to pass on any assets, most do not want to leave their heirs with any additional financial burden. This situation makes Retirement Dreamers good candidates for modestly priced protection products such as disability, long-term care, and life insurance. Financial institutions that can provide guidance and resources for obtaining end-of-life documents and simple, straightforward accounts to protect savings, transaction processing, and identity-theft and overdraft protection will likely be rewarded with loyal and modestly profitable customers for many years.

For more information, contact CFD.