Although rarely recognized as such, members of the boomer demographic are highly diverse. There is one group to consider, however, that you may not have thought of: affluent couples with children.
As defined by the Cohorts Consumer Segmentation System, this group is composed of urban families with sufficient financial resources. Instead of planning their every move around their children, as some traditional couples do, this group is focused on family adventures, and its members consider themselves connoisseurs of a cultural lifestyle. Approximately 5.2 percent of U.S. households fall into this category.
You can reach this highly desirable group, but beware. When reviewing the Cohorts Consumer Segmentation System data on affluent baby boomers with children, keep in mind the following tips.
They've had a rude awakening
Even today's affluent baby boomers with children are likely to have fallen prey to the mentality of living in the now and accepting a self-indulgent lifestyle that included debt. We've seen what happened when another boomer group experienced a jolt of reality. In the mid '90s, just as the leading-edge baby boomers began turning 50, their laissez-faire attitude toward the future and pushing off tomorrow's savings for today's luxuries came crashing down. Financial advisors became a go-to source for planning and a strict focus on asset accumulation, making products such as whole, universal, and variable life insurance popular.
Just as members of this group embraced many insurance products, the insurance companies embraced them. Recognizing that 50 is the new 40 and that boomers are more physically active and fit than they were in the past, underwriting for some subsets of this group has been eased. In addition, their busy lifestyles have led to "one-stop shopping" and the inclusion of extras to make their lives easier, such as assistance programs with disability insurance policies.
They're quick studies
Don't interpret their late start as being asleep at the wheel. Boomers aren't afraid to do their homework and, taking the lead of their children, have become technologically savvy. They have logged on, tuned in, and subscribed to a variety of personal finance sources to get up to speed. They're protective of their money and for the most part are willing to do the work they think is necessary to keep what they have. At the very least, they want choices and access to the best information to make their decisions.
With this in mind, be willing to offer additional resources, tools, and insight to help them learn more. And be prepared to make those resources available in a variety of formats -- interactive calculators, podcasts downloadable to iPods, and Web logs ("blogs").
They're reinventing the concept of retirement
Slowing down, spending less, and living a sedentary lifestyle are practically the last thing many boomers want to do in their golden years. As compared with their Depression-era parents, boomers are healthier, better educated, and living well into their 80s and beyond. The increasing life span has given boomers the chance to reinvent and rewind instead of winding down. When working with boomer clients, make sure you have a clear picture of how they envision retirement and what activities -- from second careers and extensive volunteer activities to travel and cultural excursions -- they plan to pursue.
At this point in many boomers' lives, they want to give back to their communities, so estate planning and charitable giving become key elements of their financial plan. At the same time, this wave of retirees will stress government and social services to historic levels, which means they must take more personal responsibility for their health care and in maintaining their desired lifestyle in retirement. So a plan to smartly manage their income while they are retired, in addition to a plan to accumulate that income prior to retirement, should also be emphasized.
Remember, as affluent baby boomer couples with children continue to ask "What next?" instead of "What now?" the biggest mistake you can make is assuming you have them all figured out. If you're willing to sell on their terms and put your recommendations into the larger context of their plans, you'll develop a solid relationship for the long term.
Judith B. Bramson is assistant vice president of marketing for the United States Insurance Group.
