Baby Boomers Reshaping Retirement

With a shift in lifestyle, the baby boomers will demand changes in the array of credit union products and services.


Since 1946, baby boomers have reshaped and redefined society with each life milestone. Now, as they approach retirement, some will retire in the traditional sense of trading in their slacks and suits for golf shorts, but others will reinvent retirement as we know it. Credit unions need to be in tune with this generation and their unique characteristics to ensure they can properly serve these members’ varying needs.

Change in Lifestyle
Much of this generations’ impact stems from their sheer size, but some is also due to personal decisions. Baby boomers have made and will continue to make decisions that differentiate this generation from those before it and retirement will be no different.

Baby boomers are expected to approach retirement as a turning point, not an ending point. According to a Merrill Lynch survey,

76 percent of boomers intend to keep working and earning in retirement

The survey found that on average this generation expects to “retire” from their current career around age 64 and then launch into an entirely new career. These new careers will not be all work and no play – 42 percent of boomers want cycles of work and leisure, another 16 percent plan to work part-time, 13 percent hope to start their own business and only 17 percent hope to never work for pay again.

Given this new vision of retirement, credit unions will have to evaluate their retirement programs to make certain they have the proper products and services to meet these members’ needs.

External Factors
Beyond the choices that baby boomers have and will make, there are external factors contributing to this generation retiring differently.

Less Pensions
A study by PricewaterhouseCoopers found that nearly half of companies expecting to change their pension plans in the next year are considering ending benefits for all employees. In addition the study showed that more than a third that offered pensions have already reduced these benefits over the past three years. Because the baby boomers are so close to retirement, they have less time to increase their savings to offset the effect of no/decreased pension payments.

Longer Life Expectancy
Not only must these retirees be concerned about accumulating enough money to retire comfortably, but they must also think about how to make that money last longer. Since 1900, the average life expectancy has increased from 47 years to an all-time high of 77 in 2000. This longer life span magnifies the importance of offering inflation protected products.

Rising Medical Costs
Rising medical costs have received vast media attention, and for good reason – for the past 20 years, health care costs have outpaced inflation. In addition, many companies predict that medical costs will grow by more than 10 percent annually going forward. Members will be looking for products and services that will help them save/pay for medical services.

Couple all this together and retirement is going to look quite different than in years past.

What Can Credit Unions Do?
As with any business, the best way to please the customer is to give them what they want. Given the environment and lifestyles described above, this can be achieved through providing products and services such as:
  • Annuities with flexible withdrawal provisions
  • Immediate fixed annuities
  • Guaranteed retirement income securities (GRIN)
  • Automatic portfolio-rebalancing tools
  • Inflation protected products
  • Adjustments to loan underwriting criteria

To learn more about the baby boomer generation, how they plan to retire, and how to serve them, join us for the webinar: Retiring Baby Boomers: Strategies to Transition with Their Changing Needs.




May 8, 2006


  • Do you know what kind of work, these Baby Boomers will be working in?
  • I would like to know-how do do think the nursing homes are going to have change for the baby boomers? thank you for your time