One of the characteristics that separate boomers and their retirement planning from that of generations older than they are and the Gen Xers that follow is the experience of having done everything throughout their lives in a crowd. In my case, there were 50 kids in my elementary school classes and 60,000 students on the main campus of Ohio State University when I graduated. And that was only the beginning.
Researchers say that as a result of these experiences, boomers have a "group mentality." They see themselves as part of a large like-minded club. Marketers have used that to their advantage, creating things like "Preferred Shopper" clubs and membership shopping businesses like Costco and Sam's Club.
Now as boomers lose some of the group identities that they've had for years -- hardworking company employee, soccer parent -- they are taking on new ones that will have a huge impact on business. They are becoming grandparents, caregivers, retirees, investors and users of health care services. Every industry that serves boomers as they rush headlong into their new retirement IDs is facing a tidal wave of change and opportunity.
A big business is growing up around slicing and dicing boomer attitudes toward health care and finances. Minneapolis-based Deft Research is one of those companies. Among other things, it specializes in predicting which Medicare insurance package a 64-year-old boomer is likely to choose when he turns 65 and is eligible for Medicare next year. Its customers are health care organizations, insurance companies and pharmaceutical firms.
Among the questions that they are most interested in answering is when boomers will retire, why they are choosing the retirement timing they do and how much income will they have to spend after they retire. Deft began putting 63- and 64-year-olds under a microscope in 2007. One of its early conclusions is that boomers are much less likely than current retirees to happily accept whatever plan their current insurer offers. About 57 percent of boomers about to be eligible for Medicare are actively shopping for the best plan, while only 39 percent of the generation older than they are did this kind of active shopping.
A factor that Deft identifies as a key driver in what boomers decide is the rate of involuntary unemployment among those age 60 to 64. The U.S. Department of Labor calculates that about 8 percent of boomers in that age group see themselves as seeking work and unable to find it. Deft says this is pushing boomers into early retirement and reducing their ability to choose the more expensive and feature-filled Medicare plans. That in turn, determines which kinds of plans will be most readily available.
These factoids are small pieces of a trend that will shape the retirement planning of the largest generation ever and ultimately, they will change the lifestyles of aging boomers permanently.