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Sunday, December 07, 2014

US Boomers face good or bad time (financially) in retirement - it all depends

There is a new book that tries to answer the question about the future financial well-being of US Boomers called : "The Coming Retirement Crisis and What to Do About It."

I have bought a copy and reading it will be one of the zillions of things I plan to do over the Xmas period.

The Economist has a good blog summary.

From a marketer's perspective this is a rather important subject. You have people like me preaching the importance of the older consumer but then there is another argument, very often made by me, saying that older people are going to have lots of financial hardship when they stop work.

How can both arguments be correct? Here are a few thoughts on that subject:

  • It is all relative, older consumers will have a tough time but that needs to be measured relative to the financial state of their children and grandchildren.
  • What is 'having a hard time'. Having to survive on 10% less money than when they were working or 50%?
  • When during their post work period do things deteriorate (financially) - immediately - only when they are confronted with unexpected large bills?

I can think of another ten of these question statements.

So what do we know for 'certain'? The wealthiest 10% will be an attractive group of consumers unlike their mirror image at the bottom of the wealth table.

The attractiveness of the 80% in the middle have lots of caveats attached.

My working assumption is that the group with the spending power probably extends to the top 20% and the group who will just about survive is the bottom 50%. The financial attractiveness of the remaining 30% all depends on your definition.

So, if you have any sense you will build your marketing strategies around at least two groups  -the wealthy and those surviving. Both will be attractive markets but will have totally different needs. Dick Stroud  

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