Baby boomers have rewritten the rules at every stage of their lives. They will rewrite the rules of retirement as well.
In less than 10 years, age 50+ consumers will control the economy for the first time in history. By 2015, the US baby boomer generation will command almost 60 percent of net US wealth and 40 percent of spending. In many categories, boomers will represent over 50 percent of consumption and will comprise a majority of the share growth. Compared to previous generations, boomers have spent significantly more throughout their lives, and their spending peaks later in life.
While the conventional wisdom about boomers suggests they are widely affluent, only 25 percent are financially prepared for retirement and are aging with confidence. More than half of this generation, a massive cohort comprising 24 million people, envision a comfortable retirement, feel entitled to the good life, but lack the financial resources to pay for it. These boomers share the same aspirations as the affluent but won’t be able to maintain their current lifestyle without continuing to work or cutting spending by 25 percent or more.
Based on a distinctive combination of economic forecasting, demographic modeling, and market research, the McKinsey Global Institute and McKinsey’s marketing practice provide a “predictive” view of the economic and psychographic situation of the US baby boomers in the 2010 to 2015 period.
The research provides a call to action for companies to understand and properly serve the aging boomers as new customers, determine what role boomers can play in their organization, shift products and services to address the rise and fall of boomer spending, and invest now to develop new products and services to address aging boomers’ needs, especially the unprepared segment.