“It’s a sad truth that 60% of baby boomers are more afraid of running out of money in retirement than they are of dying”, says Maurie Backman in The Motley Fool, a well-known financial website.
Maurie lists some sobering statistics:
- A good 33% of Americans have zero retirement savings.
- Roughly 30% of Americans 55 and older have no retirement savings.
- 56% of Americans have less than $10,000 in retirement savings.
- Only 31% of seniors 65 and over have $200,000 in a retirement account.
- About 25% of Americans 65 and over rely on Social Security as their only source of retirement income.
It gets worse . . .
The US now has a debt of $21 trillion dollars according to the National Debt Clock. That is $173K per tax payer. Total debt (or unfunded liabilities) which includes Social Security, and Medicare is $112 trillion or $927k per taxpayer.
43% of workers according to a CNBC article over the age of 50 will rely on social security for a major portion of their income. Social Security was set up to supplement our retirement income, about 40% of our monthly income, not replace it.
But Wait, there’s More
Robert Brokamp, a Certified Financial Planner for Motley Fool, says the stock market will take a hit when baby boomers retire. “Given that baby boomers make up 44% of all mutual fund shareholders, according to the Investment Company Institute, we’re talking about a massive block of shareholders selling much of those holdings to pay for living expenses.” This is about $7 trillion or 41% of total mutual fund holdings. This doesn’t include company pensions, government pensions or individual stock and bond holdings.
It’s hard to hear, isn’t it?
So, let’s all give up and join the bread lines. There is no hope. . . or is there?
So as the saying goes there are two sides to every coin
There are opportunities out there and, Babyboomers, I say again, it is time to seriously consider how you want to take control of the next chapter of your lives.
Think about it . . .
- What is the once-in-a-lifetime opportunity that is coming your way?
- The projected business opportunities here in the U.S. in the next few years is a Trillion dollars. Are you Ready?
- Baby Boomers are ready to spend billions. Is your business focused on them?
- How to take advantage of a trillion-dollar opportunity by starting a side business while you keep your day job?
- How to recognize the coming million dollar business opportunities and how to take advantage of them?
While baby boomers may be pulling money out of the stock market and it could and likely will, cause the market to go down, that money isn’t disappearing into thin air. Baby boomers will be using it to live.
2014 census data indicated there are 76.4 million baby boomers.
As of 2016 data, there was $16.34 trillion in mutual funds. Baby boomers control 41% of it or $7 trillion dollars.
Boomers and older Americans own 63 percent of all American financial assets making them a serious economic force to be reckoned with and a highly coveted group for marketers looking to have a serious impact
Huffington Post
Key things to know about Baby Boomers
They are generous
Boomers buy for others not just themselves. Neil Patel says ‘ Boomers love to invest in educational products and services, especially for their grandchildren.”
They spend on their pets.
Boomers are technically savvy.
A study by Immersion Active found 66% of boomers regularly buy online, which means they can be reached through social media. Facebook has been found to be the most popular social media platform for Boomers.
Personal assistants like Google Home and Amazon Echo will become more prevalent.
Focused on Wellness
Baby Boomers are living longer and want to be healthy, well into their 90’s. According to a US News and World report study, baby boomers will increase their spending on wellness from $200 million to $1 Trillion!
Health club memberships for boomers is one of the fastest growing segments, up 266% since 1987. Now health clubs have started exercise classes, specifically for baby boomers.
Boomers are also buying fitness equipment. Pedego, who builds electric bikes, co-founded in 2008 by Don DiCostanzo and Terry Sherry when both were in their early 50s. Noticed when they started their business? At the height of the Great Recession. Today, they have $15 million in sales. They found an idea and went for it.
In need of Medical Devices
Because of aging, but also because of being so active, boomers will increasingly need hip and knee replacements. Extreme sports such as rafting, sky diving, and paragliding are common among boomers which puts stress on the body.
Crave Entertainment
Boomers, especially retirees, are watching more TV, giving a boost to cable and video on demand services.
But in-home entertainment isn’t the only entertainment that is growing. Nearly half (44 percent) of Boomers who attended an event (rock concert) in the last year are going to more concerts now than compared to 10 years ago. While millennials prefer texting and social media, boomers prefer face to face gathering and it shows in their activities.
One of the top grossing bands of the last few years is Iron Maiden. Who?
They are a rock group, started in 1975 with their first album launched in 1980. They didn’t have a top ten song until the fall of 2006 and just 2 top ten songs since that time. Yet they have such devoted fans that Lady Gaga, when told concerning her success that she would be the next Madonna. “I used to always say to people when they would say, ‘Oh, she’s the next Madonna.’ No, I’m the next Iron Maiden”.
Entrepreneurs are Getting into Business
BizStarters – Jeff Williams who coaches older entrepreneurs, 60% want the flexibility in their schedule rather than income. A study from the Kaufman Foundation puts the number higher at 80% who want income, but not 40-50 hours a week. There were 452,000 business startups in 2014, which was a 40 year low, however the number business startups is increasing.
24.3% of those businesses were started by baby boomers or just under 110,000 and the percentage is almost the same as the 25% for millennials. So baby boomers aren’t headed to the pasture, their investing in their own businsses.
Lifestyle Entrepreneurs
The majority of baby boomer entrepreneurs want freedom and flexibility of a part-time schedule. The income is nice but they also want to have the ability to take 3 weeks of vacation. They can be categorized as LifeStyle entrepreneurs.
Elaine Povinelli is a typical lifestyle entrepreneur. In 2010, at age 54, Povinelli began casting about for a new business idea. She was willing to put in serious startup time in anticipation that later, with operations running smoothly, she could taper off into semiretirement. “As long as I can make a living, I am not looking to get rich,” she says. “I have worked so hard my whole life. I don’t want to work more than 20 hours a week right now.” So, she started Dainty Wrist Jewelry which focuses on jewelry for women with small wrists.
Full-Time Entrepreneurs
The other 20% of baby boomer entrepreneurs are full-time with their business and their businesses cover the gambit of industries. While startups have a high failure rate after 5 years, baby boomers starting businesses succeed more often than not. There are three main reasons for this. First, baby boomers are more cautious going into business, often starting on a part-time basis. Two, they are well-capitalized having built up a healthy nest egg over their careers. Third, they have more business experience and can apply that knowledge to their business.
Whether starting a business or just enjoying life, baby boomers are a force with whom to be reckoned.
The question you must ask yourself is: How will my business tap in the trillions that will be spent by Baby Boomers?
Actions:
If you are looking to start a business, take the following actions.
- As a baby boomer, what things frustrates you on a day to day basis. In every problem lies an opportunity.
- Why does the “thing” frustrates you? What issue does it cause? Or maybe it causes frustration to others, such as your aging parents. See story of HDSMedallion
- How would you fix the problem?
- Write down those steps.
- Talk to other baby boomers. If this fixes the problem; what would they pay for the solution? If they are willing to pay, you are on to a viable business idea.