Descending the Corporate Ladder

Strategic Guidance Consulting Inc.All rights reserved Market Research – The Aging Baby Boomer – Canada 2006

Descending the Corporate Ladder

Top 10 Myths Surrounding Aging Top 10 Myths Surrounding Aging Baby BoomersBaby Boomers

&&

What Boomers Need From What Boomers Need From EmployersEmployers

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Strategic Guidance Consulting Inc.All rights reserved

Market Research – The Aging Baby Boomer – Canada 2006

The State of the Aging Baby BoomerThe State of the Aging Baby BoomerMarket – Canada – 2006Market – Canada – 2006

Sam CukiermanSam CukiermanManaging PartnerManaging Partner

Strategic Guidance Consulting Inc.Strategic Guidance Consulting Inc.

Research Sponsors:Research Sponsors:DeGroote School of BusinessDeGroote School of Business

Verity International LimitedVerity International Limited

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Research for building loyalty to capture this market segment

Survey sample:Survey sample: 1,000 Canadians aged 47 – 64, Working full-time, (company or self-employed) Weighted by age, gender, and marital status (to

reflect Canadian demographics consistent with 2004 Statistics Canada data).

Survey was conducted in November 2005. Survey was conducted in November 2005. Sample accurately reflects the views of the

target group, within 3.1 percentage points 19 times out of 20.

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Age and Marital Status Age Distribution

26%

37%

25%

12%

47-49

50-54

55-59

60-64

Marital Status

68%

23%

9%

Married

Widowed, Divorced, Separated

Single

Income / Net Worth Household Income

32%

26%

18%

15%

9%

<$50,000

$50K - $74K

$75K - $99K

>$100,000

No Response

Net Worth

27%

21%16%

13%

23%

<$100,000

$100K - $249K

$250K - $499K

>$500,000

No Response

Research for building loyalty to capture this market segment

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Myth #1Boomers will retire, find their place in the

sun, and live happily ever after

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Boomers will retire, find their place in the sun, and live happily ever after

Facts:

The word retirement is a misnomer – it is not a point in time – it’s a lifestyle

The lifestyle will engage boomers in work

More than half of Aging Baby Boomers plan to continue working on a part-time basis after they “retire”

Myth #1Myth #1

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At Desired Retirement Age I Will ...

8%

52%

18%

22%

Continue working on a full- time basis

No longer work

Not sure / don't know

Continue working on a part- time basis

By Age

55%

52%

52%

50%

47-49

50-54

55-59

60-64

By Net Worth

53%

50%

50%

59%

<$100,000

$100K - $249K

$250K - $499K

>$500,000

… Continue Working On Part-Time Basis.

Boomers will retire, find their place in the sun, and live happily ever afterMyth #1Myth #1

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At retirement I expect to need ...

49%

37%

7%7%

Less monthly income than today

About same monthly income as today

More monthly income than today

Don't Know


… and their needs for monthly income will be about the same as they spend today

… to spend money on themselves as a reward for a lifetime of hard work, on travel, on hobbies, on helping their children

Myth #1Myth #1

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How many years of retirement income do you How many years of retirement income do you think you will require after retirement?think you will require after retirement?

This has implications for the social fabric of our society – with great This has implications for the social fabric of our society – with great influx of boomers wishing to work, where are the jobs? How will influx of boomers wishing to work, where are the jobs? How will employers respond to meet boomer expectations (realistic or employers respond to meet boomer expectations (realistic or unrealistic)?unrealistic)?

Net Worth

Total <$100K $500K or more

Less than 5 years 2% 3% 1%

5-10 years 10% 15% 4%

11-15 years 17% 20% 15%

More than 15 years 50% 42% 64%

Don’t know 21% 20% 16%

Myth #1Myth #1

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Myth #2 Aging baby boomers are financially

prepared for retirement today

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Aging baby boomers are financially prepared for retirement today

Facts:

They are not financially prepared

85% of aging baby boomers feel only somewhat prepared, not at all prepared, or simply do not know

Myth #2Myth #2

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Financial Preparation For Retirement

15%

61%

21%

3%

Somewhat prepared

Not at all prepared

Don't know Very prepared

All Those Continuing To Work

32%

29%

39%

With your current company

With a different company

Don't know

Self-Employed Continuing To Work

60%12%

28%

Aging baby boomers are financially prepared for retirement todayMyth #2Myth #2

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Myth #3Baby boomers access advice and information

and place their trust in one advisor

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Baby boomers access advice and information and place their trust in one advisor

Facts: 76% of baby boomers have started to “plan” for

retirement They begin with self-help modes of advice –

websites, books, friends and family – and find the degree of helpfulness lacking

They progress to more credible professional sources of advice for planning; progression is slow and there is considerable room for growth

Myth #3Myth #3

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Which of the following people / resources have you talked to or consulted with regarding your retirement planning? – note HR resource ranks 7th

2%

5%

6%

7%

7%

14%

15%

18%

18%

27%

31%

31%

34%

Career counseling firm

Real estate agent

Lawyer

Someone in government

Broker

Accountant

Human resource person at place of employment

Financial institution manager / acct. manager

Life insurance agent

Independent financial planner

Books, articles, newspapers

Family member / friend / colleague

Financial planner with financial institution


Financial planners are the predominant source of advice – financial planners in banks, trusts, and credit unions get highest usage scores

Myth #3Myth #3

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The degree of helpfulness varies among advice providers - among those who have sought professional advice, independent financial planners rank highest in degree of helpfulness

Those who use accountants (only 14%) rank them as high as financial planners for helpfulness

Myth #3Myth #3

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Degree of Helpfulness

52%

56%

57%

59%

59%

61%

64%

67%

67%

70%

71%

76%

76%

81%

19%

25%

16%

16%

19%

18%

27%

15%

14%

19%

25%

22%

21%

33%

Life Insurance Agent

Career Counselling Firm

Real Estate Agent

Family / friend / colleague

Web sites

Books / articles / magazines

Lawyer

Broker

Someone in Government

F.I. / Account Manager

HR & Workplace

Accountant

Financial Planner with F.I.

Independent Financial Planner

Extremely Helpful

Extremely + Very Helpful

Baby boomers access advice and information and place their trust in one advisorMyth #3Myth #3

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Myth #4The 4 traditional cornerstones for retirement - savings, health, life insurance, and investment

plans - are well-covered

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The 4 traditional cornerstones for retirement - savings, health, life insurance,

and investment plans - are well-covered

Facts:

Life insurance and RRSPs dominate financial holdings

Significant opportunities for growth exist in health, disability and critical care insurance and estate planning

Myth #4Myth #4

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Assets Currently Held by Aging Baby Boomers

7%

10%

16%

21%

24%

27%

39%*

40%*

48%

57%

59%*

64%*

68%

77%*

Registered Retirement Income Fund (RRIF)

Estate plan

GIC outside of RRSP

Power of attorney

Mutual funds outside of RRSP

Stocks / bonds outside of RRSP

Critical care insurance

Long term care insurance

Company pension plan

Will

Disability insurance

Health insurance

Registered Retirement Savings Plan (RRSP)

Life insurance

Insurance Coverage *

23%

47%

42%

5%

6%

24%

13%

10%

17%

15%

30%

4%

7%

18%

18%

Life

Health

Disability

Long term care

Critical care

Through Work Only

Acquired Personally

Both

39%

77%

59%

64%

40%

The 4 traditional cornerstones for retirement -savings, health, life insurance,

and investment plans - are well-coveredMyth #4Myth #4

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Myth #5Enormous generational wealth transfer through

inheritances are occurring or will occur

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Facts:

Enormous generational wealth transfer through inheritances are occurring or will occur

Facts: Only 11% of aging baby boomers have inherited any

kind of assets in the past 5 years

55% of aging baby boomers do not anticipate inheriting any assets in the next 10 years – this holds true even for those aged 60-64

26% do anticipate inheriting some wealth bequeathed by an estate, but this will not occur until their very late sixties / early seventies

Myth #5Myth #5

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Have you inherited assets from an estate that was bequeathed to you in the past five years?

In the next ten years or so, do you anticipate inheriting assets from an estate?

11%

89%

Yes

No

26%

55%

19% Yes

No

Don’t Know

19%

29%32% 35%

<$100,000 $100K - $249K $250K - $499K >$500,000

By Net Worth

Enormous generational wealth transfer through inheritances are occurring or will occurMyth #5Myth #5

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Enormous generational wealth transfer through inheritances are occurring or will occur

Does this make sense? Yes because…

They are spending money to help their children financially and will do so for the next 10 years

Only after age 64 do the number of children that are financially independent exceed the number of children receiving financial help

They expect to live well into their eighties, remain mentally and physically active, and be vigorous consumers, believing the monthly income requirements will be at least the same as what they spend today

Myth #5Myth #5

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Respondents with children47-49 50-54 55-59 60-64

Provide financial help to children 79% 89% 76% 77% 47%

Children financially independent 21% 11% 24% 23% 53%

ALLBy Age Group

Enormous generational wealth transfer through inheritances are occurring or will occurMyth #5Myth #5

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Myth #6Company human resources functions are doing

a good job helping future outgoing boomers when they leave their full time jobs

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Company human resources functions are doing a good job helping future outgoing

boomers when they leave their full time jobs

Facts:

Human resource management for career planning and advice is weak – research anecdotes from personal one-on-one interviews backed by quantifiable results

Career management consulting firms can fill the gap if company HR function is unable to fulfill boomer needs

Myth #6Myth #6

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What benefits will you be entitled to receive?

Health care benefits 77%

Dental benefits 60%

Insurance 58%

Other 7%

Don't know 1%

31%

53%

16%Don’t Know

No

Yes

When you retire, will you be entitled to receive any continued benefits from your existing employer?

Myth #6Myth #6

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Importance of Topic in Retirement Planning

- Very Important / Somewhat Important Rating-

43%

47%

49%

59%

60%

64%

72%

74%

81%

92%

Offering outside consulting / counseling

Seeking new career choices after retirement

Evaluating personal strengths for new career choices

Advice on adjusting to retirement

Suggestions for new activities to be involved in

Prepare you in event of early retirement

Understanding what to expect in retirement

Financial counseling

Legal matters (wills, power of attorney)

Benefits you will be entitled to

Myth #6Myth #6

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Myth #7After retirement, baby boomers will move,

downsize their homes, and live out-of-country

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After retirement, baby boomers will move, downsize their homes, and live out-of-country

Facts:

Two thirds of aging baby boomers will stay in their current residence

Only 20% of aging baby boomers will live any part of their retirement outside of Canada

Myth #7Myth #7

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After retirement, baby boomers will move, downsize their homes, and live out-of-country

<1%

1%

4%

9%

13%

73%

United States

Somewhere other thanCanada or U.S.

Different province in Canada

Don't know

Different city / town/area in same province

City / town / areawhere currently reside

Which of the following best describes where your main residence will be when you retire?

Plan on Living Any Part of Retirement Outside Canada

Yes20%

No80%

- Where ?-

Asia, Australia,Other

7%

14%

18%

21%

52%

South America

Europe

Caribbean

United States

Myth #7Myth #7

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Myth #8When the boomer works less they will do less

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When the boomer works less they will do less

Facts:

Aside from part-time work, caring for physical appearance, exercise, travel, cooking, home renovations, gardening, charity and volunteer work will dominate retirement time

Standard of living, CPP availability, medical and dental affordability are key issues

Myth #8Myth #8

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When the boomer works less they will do less

Walking 75% 86% 11%Travelling 43% 68% 25%Cooking 57% 68% 11%Volunteering 30% 62% 32%Gardening 50% 61% 11%Home renovation / repairs 46% 49% 3%Charity work 17% 38% 21%Home decoration / décor 28% 34% 6%Photography / art 25% 34% 9%Exercise classes 14% 33% 19%

Golf 21% 32% 11%

Wine tasting 15% 22% 7%

Knitting / sewing 18% 21% 3%

Sitting on board of directors (paid or unpaid) 13% 20% 7%

Weight training 15% 19% 4%

Social club member 10% 18% 8%

Religious classes / committees /services 12% 16% 4%

Social work 6% 12% 6%

Running 8% 9% 1%

Sailing 3% 6% 3%

Tennis 4% 5% 1%

Current Activities - Do / Plan To Do When RetireCurrently

DoPlan To

Do *%

Change

* includes those who currently do and those who plan to do after they retire.

Myth #8Myth #8

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Myth #9Boomers are not web savvy – their thirst for

information will dry up

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Boomers are not web savvy – their thirst for information will dry up

Facts: Boomers want a website dedicated to their needs

Three out of every four (74%) aging baby boomers indicated they would definitely / probably be interested in accessing a website specifically geared to serve their needs. This is consistent across all age, income and net worth groupings

(Note: This survey was conducted on line. Results of data presented in this section may contain some bias given the respondent’s predisposition to a comfort level with the web).

Myth #9Myth #9

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Boomers are not web savvy - their thirst for information will dry up

Respondents interested in accessing website (definitely / probably) for ...

42%46%47%

50%61%61%

63%63%65%66%68%70%

74%74%75%

78%81%81%82%82%

84%85%

88%

Art and collectibles

Recreation products

Automobile sales

Municipal or other political issues

Clothing for sale

Automobile service

Employment opportunities

Hardware products

Home renovation / repair services

Volunteer opportunities

Consumer electronics

Financial services

Dining recommendations

Health and fitness products / services

Computer products / services

Travel specials

Books

Hobbies

Food preparation / recipe information

Food products

General newsletter

Medical services

Entertainment discounts

“Top Ten”

Myth #9Myth #9

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Myth #10THE BIGGEST MYTH OF ALL – we’ve identified this group; we’ve got our strategic plans lined

up; we’re meeting the aging baby boomers’ needs today

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We’ve identified this group; we’ve got our strategic plans lined up; we’re meeting the

aging baby boomers’ needs today

Facts: Everyone wants the business of this “brick-

rich / cash rich” group

Few are meeting their expectations today

Opportunity abounds

Myth #10Myth #10

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ALL RESPONDENTSAbove

AverageAverage

Below Average

Don't Know

Pharmacies 31% 57% 8% 4%Vacation destinations 27% 54% 9% 10%Seniors clubs / associations 25% 48% 7% 20%Book stores /sellers 20% 64% 7% 9%Specialty magazines / books 20% 60% 8% 12%Specialty food stores 19% 58% 10% 13%Restaurants 19% 67% 9% 4%Doctors 19% 58% 20% 4%Health / fitness clubs / gyms 18% 53% 16% 14%Pharmaceutical companies 18% 56% 19% 7%Travel agents 18% 58% 10% 14%Hotels 17% 65% 9% 9%

Ranked in order of “above average” in meeting the needs of aging baby boomers, the following “top 12” businesses, services or professions are shown:

Myth #10Myth #10

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FINANCIAL SERVICES - ALL RESPONDENTS

Above Average

AverageBelow

AverageDon't Know

Financial planners associated with specific financial institution 16% 57% 12% 15%

Independent financial planning 14% 60% 11% 15%

Banks 14% 59% 22% 5%

Credit unions 13% 53% 12% 22%

Mutual fund companies 12% 57% 14% 17%

Life insurance companies 11% 61% 18% 10%

Financial services industry falls into a middle category among the forty businesses, services, and professions surveyed :

Myth #10Myth #10

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ALL RESPONDENTSAbove

AverageAverage

Below Average

Don't Know

Gasoline companies 3% 33% 56% 8%Provincial government 4% 40% 50% 7%Federal government 3% 41% 49% 6%Municipal government 4% 47% 43% 7%Retirement homes 15% 44% 25% 17%Automobile dealers 7% 58% 24% 11%Automobile manufacturers 8% 59% 23% 10%Airlines 8% 57% 23% 12%Home builders 7% 57% 23% 14%Banks 14% 59% 22% 5%

The businesses ranked most negatively – the percentage aging baby boomers who believe their needs are met on a “below average” basis :

Myth #10Myth #10

44



KEY IMPLICATIONS

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Key Implications

Life expectancy and expectancy for what life offers are high – catch the wave

Health conscious and confident – focus on wellness

Spenders – careful, and demanding a value proposition that makes sense

Branding is key – talk to them in their language – keep it simple - deliver messages from respected sources through an attention span that filters what they see, find credible and believable

Ethics will grow in importance

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Key Implications

Be innovative – create a value proposition on your own, or seek strategic alliances that twin those who are serving boomers well with those who need to break through and profit from this market segment

Case histories: AMEX / insurance; the GAP / Forth and Towne; Vespa / homebuilders; Shoppers Home Health / TEMPUR; Kellogg / Smart Start pedometer; Dove / Mirrors; Proctor and Gamble / make-up selling “hope”; Honda, Lexus, Chrysler

BIG GROWTH: estate planning; health insurance; cooking, specialty foods; wellness; account management cross- sell ratios

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Descending the Corporate Ladder