The Changing Nature of Retirement June 2019

The Changing Nature of Retirement discusses why aging Boomers will have an enormous impact on not just the financial-services industry, but also the US economy as a whole. The report encompasses all financial areas—such as investments, advice, credit, and insurance—and includes more than 90 figures and a dozen tables. Read more about the report

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Table of Contents

Introduction 1
How We Did This Analysis 2
Background 4
Executive Summary, Findings, and Implications 6
Detailed Findings 13
Analysis of 20-Year Trends (Trend Charts) 13
Retirement-Account-Ownership Incidence Trend 13
Retirement-Account Mean-Balance Trends 19
Retirement as a Savings and Investment Goal 25
Retirement Attitudes 28
"I will rely on Social Security for my retirement income." 28
"I would save more for retirement if it were tax deductible." 29
"I don't know how much to save for retirement." 30
"It is better to enjoy your money now than to save for old age." 32
"I expect an inheritance that will increase my retirement income." 33
"I need expert help in retirement planning." 35
"I expect to spend most of my wealth before I die." 36
"If my home were not increasing in value, I would need to save more than I currently do." 38
Demographics 39
Financials 51
Balance Sheet 51
Insurance: Property/Casualty Insurance 79
Channel and Transactions 87
Financial Advice and Advisors 91
Financial Attitudes 101
The Devil You Know 102
Rise of the Machines 103
Self-Reliance 105
People Needing Other People 106
Appendix: References and Resources A-1

List of Charts and Tables

Number Title Page
Introduction 1
How We Did This Analysis 2
Background 4
Executive Summary, Findings, and Implications 6
Figure 1 Number of Households by Retirement Balances and Age of Primary Head 7
Figure 2 Why the Revolving Retired Are Now Working 9
Figure 3 Current Focus in Retirement 10
Detailed Findings 13
Analysis of 20-Year Trends (Trend Charts) 13
Figure 4 Twenty-Year Trend: Incidence of Household Retirement Product Ownership 13
Figure 5 Twenty-Year Trend: Retirement Product Ownership by Primary Household Heads Age 75 and Older 14
Figure 6 Twenty-Year Trend: Incidence of Retirement Product Ownership by Primary Household Heads Age 55–74 14
Figure 7 Twenty-Year Trend: Incidence of Retirement Product Ownership by Primary Household Heads Age 35–54 15
Figure 8 Twenty-Year Trend: Incidence of Retirement Product Ownership by Primary Household Heads Under Age 35 16
Figure 9 Twenty-Year Trend: Incidence of Retirement Product among Preretired Primary Household Heads 17
Figure 10 Twenty-Year Trend: Incidence of Retirement Product among Younger Retired Primary Household Heads 17
Figure 11 Twenty-Year Trend: Incidence of Retirement Product among Older Retired Primary Household Heads 18
Figure 12 Twenty-Year Trend: Mean Balance in Retirement Accounts among All Households with Retirement Products 19
Figure 13 Twenty-Year Trend: Mean Balance in Retirement Accounts among Primary Household Heads Age 75 or Older 20
Figure 14 Twenty-Year Trend: Mean Balance in Retirement Accounts among Primary Household Heads Age 55–74 21
Figure 15 Twenty-Year Trend: Mean Balance in Retirement Accounts among Primary Household Heads Age 35–54 22
Figure 16 Twenty-Year Trend: Mean Balance in Retirement Accounts among Preretired Primary Household Head 23
Figure 17 Twenty-Year Trend: Mean Balance in Retirement Accounts among Younger Retired Primary Household Head 23
Figure 18 Twenty-Year Trend: Mean Balance in Retirement Accounts among Older Retired Primary Household Head 24
Figure 19 Twenty-Year Trend: Retirement is Savings or Investing Goal by Age of Primary Household Head 25
Figure 20 Twenty-Year Trend: Retirement is Savings or Investing Goal (By Retirement Status) 26
Figure 21 Twenty-Year Trend: "Retirement is my household's most important savings and investing goal." by Age of Primary Head of Household 27
Figure 22 Twenty-Year Attitude Trend by Retirement Status: "Retirement is my household's most important savings or investing goal." 28
Retirement Attitudes 28
Figure 23 Twenty-Year Attitude Trend by Age: "I will rely on Social Security for my retirement income." 29
Figure 24 Twenty-Year Attitude Trend: "I would save more for retirement if it were tax deductible." 30
Figure 25 Twenty-Year Attitude Trend: "I don't know how much to save for retirement." 31
Figure 26 Twenty-Year Attitude Trend: "It is better to enjoy your money now than to save for old age." 33
Figure 27 Twenty-Year Attitude Trend: "I expect an inheritance that will increase my retirement income." 34
Figure 28 Twenty-Year Attitude Trend: "I need expert help in retirement planning." 36
Figure 29 Twenty-Year Attitude Trend: "I expect to spend most of my wealth before I die." 37
Figure 30 Twenty-Year Attitude Trend: "If my home were not increasing in value, I would need to save more than I currently do." 39
Table 1 Twenty-Year Trend: Household Head by Age 40
Table 2 Twenty-Year Trend: Household Head by Life Stage and Retirement Status 41
Figure 31 Two-Decade Trend: Income by Age and Retirement Status 42
Figure 32 Two-Decade Trend: Marital Status of All Households 43
Figure 33 Two-Decade Trend: Marital Status By Age 44
Figure 34 Two-Decade Trend: Marital Status by Primary Head of Household 45
Figure 35 Two-Decade Trend: Education of Primary Household Head 46
Figure 36 Two-Decade Trend: Primary Head Has a Four-Year College Degree or More 47
Figure 37 Two-Decade Trend: Single-Family Home Ownership 48
Figure 38 Two-Decade Trend: Residence is a Condo, Townhouse, or Apartment by Age 48
Table 3 Two-Decade Comparison: Area of Residence 49
Table 4 Two Decade Comparison: Ethnicity 50
Financials 51
Balance Sheet 51
Figure 39 Two-Decade Trend: Net Worth by Age and Retirement Status 51
Figure 40 Two-Decade Trend: Investable Assets by Age and Retirement Status 52
Figure 41 Two-Decade Trend: Home Equity by Age and Retirement Status 52
Figure 42 Two-Decade Trend: Total Liabilities by Age and Retirement Status 53
Figure 43 Two-Decade Trend: Incidence of Debt-Free Households by Age and Retirement Status 54
Table 5 Differences Between 1996 and 2016: Incidences of Liabilities 55
Table 6 Mean Amount in Household Debt: Proportion of Difference 1996 to 2016 56
Figure 44 Twenty-Year Trend: Incidence of Debt among Household Heads Age 75 and Older 57
Figure 45 Two-Decade Trend: Amount of Debt among Primary Heads Age 75 and Older 58
Figure 46 Two-Decade Comparison: Incidence of Debt among Primary Household Heads Age 55–74 and Age 75 and Older 59
Figure 47 Two-Decade Comparison: Amount of Debt among Household Heads Age 55–74 and Age 75 and Older 60
Figure 48 Two-Decade Comparison: Incidence of Debt among Primary Household Heads Age 35–54 and Heads Age 55–74 61
Figure 49 Two-Decade Comparison: Amount of Debt among Primary Household Heads Age 35–54 and Age 55–74 62
Table 7 Difference in Household Ownership for Most Major Types of Assets from 1996 to 2016 63
Table 8 Change in Inflation-Adjusted Mean Balances in Assets from 1996 to 2016 65
Figure 50 Two-Decade Trend: Incidence of Assets among Primary Household Heads Age 75 and Older 66
Figure 51 Two-Decade Trend: Amount in Assets among Primary Household Heads Age 75 and Older 67
Figure 52 Two-Decade Comparison: Incidence of Assets among Primary Household Heads Age 55–74 and Age 75 and Older 68
Figure 53 Two-Decade Trend: Incidence of Retirement Accounts among Primary Household Heads Age 55–74 69
Figure 54 Two-Decade Trend: Amount in Retirement Accounts among Primary Household Heads Age 55–74 69
Figure 55 Two-Decade Comparison: Incidence of Retirement Accounts among Primary Household Heads Age of 55–74 and Age 75 and Older 70
Figure 56 Two-Decade Comparison: Amount in Retirement Accounts among Primary Household Heads Age 55–74 71
Figure 57 Two-Decade Comparison: Incidence of Assets among Primary Household Heads Younger Retired and Older Retired 72
Figure 58 Two-Decade Comparison: Amount in Assets among Primary Household Heads Younger Retired and Older Retired 73
Figure 59 Two-Decade Comparison: Incidence of Retirement Accounts among Primary Household Heads Younger Retired and Older Retired 74
Figure 60 Two-Decade Comparison: Amount in Retirement Accounts among Primary Household Heads Younger Retired and Older Retired 74
Figure 61 Two-Decade Comparison: Incidence of Assets among Primary Household Heads Age 55 to 74 and Younger Retired 75
Figure 62 Two-Decade Comparison: Amount in Assets among Primary Household Heads PreRetired and Younger Retired 76
Figure 63 Two-Decade Comparison: Incidence of Retirement Accounts among Primary Household Heads Preretired and Younger Retired 77
Figure 64 Two-Decade Comparative: Amount in Retirement Accounts among Primary Household Heads Preretired and Younger Retired 78
Insurance: Property/Casualty Insurance 79
Figure 65 Two-Decade Trend: Incidence of Homeowners or Renters Insurance by Age and Retirement Status 79
Figure 66 Two-Decade Trend: Incidence of Vehicle Insurance by Age and Retirement Status 80
Figure 67 Twenty-Year Trend: Incidence of Any Health Insurance by Age and Retirement Status 81
Figure 68 Two-Decade Trend: Incidence of Individual Health Insurance by Age and Retirement Status 82
Figure 69 Two-Decade Trend: Incidence of Any Life Insurance by Age and Retirement Status 83
Figure 70 Two-Decade Trend: Incidence of Any Group Life Insurance by Age and Retirement Status 83
Figure 71 Two-Decade Trend: Incidence of Any Individual Life Insurance by Age and Retirement Status 84
Figure 72 Two-Decade Trend: Incidence of Any Term Life Insurance by Age and Retirement Status 85
Figure 73 Two-Decade Trend: Incidence of Any Whole Life Insurance by Age and Retirement Status 85
Figure 74 Two-Decade Trend: Incidence of Any Universal, Variable, or Interest-Sensitive Life Insurance by Age and Retirement Status 86
Channel and Transactions 87
Figure 75 Two-Decade Trend: Household Use of FinancIal Institutions 87
Figure 76 Trust Specific Institutions a Great Deal 88
Figure 77 Two-Decade Trend: Number of Financial Relationships 89
Figure 78 Two-Decade Trend: Number of Financial Products 90
Figure 79 Two-Decade Trend: Mean Number of Annual Financial Transactions 90
Financial Advice and Advisors 91
Figure 80 Two-Decade Trend: Receive Advice Before Making Major Financial Decisions 91
Figure 81 Two-Decade Trend: Type of Financial Professional Used in the Past Two Years 92
Figure 82 Two-Decade Trend: A Great Deal of Trust in Type of Financial Professional 93
Figure 83 Trust in Financial Professionals a Great Deal by Age 94
Figure 84 Two-Decade Trend: How Household Interacts with Financial Professionals 95
Figure 85 Two-Decade Trend: Collaborator and Delegator Households 96
Figure 86 Two-Decade Trend: How Household Prefers to Interact with Financial Professionals 96
Figure 87 Two-Decade Trend: Sources for Financial Information 97
Figure 88 Two-Decade Trend: Interest in Learning More About How... 98
Figure 89 Two-Decade Comparison 1996–2016: Life Events in the Past Two Years 99
Financial Attitudes 101
Table 9 Comparison of Top 10 Financial Attitudes: 1996 to 2016 101
The Devil You Know 102
Table 10 Attitude Comparison 1996 to 2016: The Devil You Know 102
Figure 90 Two-Decade Trend: Would Never Get a Variable-Rate Auto Loan 102
Rise of the Machines 103
Table 11 Attitude Comparison 1996 to 2016: Rise of the Machines 103
Figure 91 Two-Decade Trend: Would Rather Use an ATM, PC, Phone, or Mail 103
Figure 92 Two-Deacde Trend: Automatic Savings is Best 104
Self-Reliance 105
Table 12 Attitude Comparison 1996 to 2016: Self-Reliance 105
Figure 93 Two-Decade Trend: Extremely or Very Confident Household Will Reach Most Important Financial Goals 105
People Needing Other People 106
Table 13 Attitude Comparison 1996 to 2016: People Needing Other People 106
Figure 94 Twenty-Year Trend: Would Buy a Retirement Savings Account by Channel 107
Figure 95 Two-Decade Trend: Channel for Obtaining Retirement-Savings Account 108
Appendix: References and Resources A-1