The over-50s: Where the bucks are
They want both: A good life and financial security
As conventional wisdom goes, the first thought in one's head at turning 50 is retirement. We hunker down, count our quarters, and begin parceling them out as minutes on the clock of life, or what's left of it. Not true. Today's 50-plus set, the baby boomers, see 50 as a new beginning in many ways, in most cases free for the first time of the burdens of family rearing and college tuitions, and with the house all to themselves. They do care about retirement, and many also carry the additional worry of aging parents, which they also must plan for.
But the 50-pluses are not a cautious generation, either. They attack these issues with receptive minds. They also think about rewarding themselves--reinventing their lives, as it were. They spend money on what they want, blithely ignoring the cautions of the fussbudgets.
"What we've got is a population that's saying, 'Now is the time to treat myself,'" says Linda Fisher, director of AARP's National Member Research Department. They've got the bucks to do so. Plus-50s account for 39 percent of the adult population over age 18 and wield about $2 trillion in spending power a year.
And as the AARP argues, along with Scarborough Research in a new study, this make the generation a prime target for advertisers, especially those in financial services. It's one they'd do well to pay more attention to. "The 50+ community, as you know, has not been a primary category," says Alisa Joseph, vice president of advertiser marketing services at Scarborough. Boomers are easy to reach. They are avid consumers of traditional media, especially of newspapers, television and news/talk radio, according to Scarborough. It reports that nearly two-thirds of consumers over 50 read a daily newspaper, and over half are heavy viewers of television. They are 26 percent more likely than other consumers to listen to news/talk radio. Fisher says AARP research has shown that 50-plus consumers also respond well to direct mail, a marketing tool once thought to be in danger of extinction with the rise of the internet. Says she: "Nine times out of 10, direct mail is the way to go."
But most important, according to Scarborough, boomers are especially open to advice in managing their finances and planning for retirement. They are 51 percent more likely than the average consumer to use a stock broker and 23 percent more likely to have a financial planner. Almost two-thirds of consumers with Certificates of Deposit for their households are over 50, according to Scarborough Research findings. For both Individual Retirement Accounts (IRAs) and Money Market accounts, about half of the people who hold them are over 50, and 42 percent of all consumers with stocks or stock options fall into this age group.
Further, the study finds, when over-50s spend on themselves, they're not nearly as price-conscious as one might think. With their years, they come to a pretty sophisticated understanding of the value-price ratio. "The older population not only has more money, but they have an attitude that leads to them spending it, and they are not just looking to spend money, they are looking to get value. They understand that price is not the only thing that determines value," Fisher says.
Aging boomers envision a life in which they can achieve financial security without sacrificing the new lives they are creating for themselves. It's about having it both ways. "Boomers at midlife, we all know that they have a mindset of wanting to be independent and wanting to have control," explains Fisher. "What's happening is they're not where they want to be in finances, but they also want to have more leisure time."
To that end, they are willing to pay more for services that save them time and advance them toward financial goals, without taking them away from their leisure activities.
But too often, says Fisher, advertisers are sending the wrong message, one that might have worked with a prior generation. Says Fisher: "We feel like not only are people being advertised to in a condescending way, we don't feel there is a lot of creative product development in this area."
AARP's National Member Research Department
By wgezuzuxcij on Wednesday, January 26, 2011 - 05:24 pm: