Roughly twice as many Americans retired in the first fifteen months of the pandemic than they did in 2019.
Some of these retirements were by choice—driven by increased investments and a refocus on what matters in life. Others were involuntary—people in struggling industries were laid off and didn’t return to work.
While there is a “Great Resignation” happening across all working age groups, Baby Boomers are leaping into early retirement—ready or not. And financial planners have found themselves in demand.
How are we seeing financial services bring customers in?
The pandemic rushed many into their golden years
According to a survey from MetLife, more than 1 in 10 Baby Boomers pointed to the pandemic as the driving factor of their early retirement.
This could be because the pandemic caused individuals to find fulfillment outside work more. It could be driven by job loss. Or increased stress at work. Or a combination of factors.
Speaking about one of her clients, who was only 51 years old, financial planner Gretchen Behnke explained, “I believe it was the pandemic that made her feel the uncertainty of life and that she didn’t want to spend any more time in a job that was very stressful, took a toll on her health, and drained her energy.”
Since 2001, the percentage of retired people ages 65-74 had been steadily declining, but this trend abruptly reversed in 2020. 65.6% of people in this age group now consider themselves retired, a rate not seen since 2011.
But the difficult thing is that many Baby Boomers who went into “early retirement” during the pandemic don’t have enough resources to remove themselves from the workforce completely.
Research by the Insured Retirement Institute (IRI) found that 45% of Boomers have no retirement savings. At the same time, the average person of this age only has only $152,000 saved. This is not enough to last the remainder of their lives, even with social security or pensions.
“They might call themselves retired, but basically they are unemployed and in a precarious state,” explained Teresa Ghilarducci, a professor of economics and policy analysis at the New School for Social Research in New York City.
As people have weighed their options and prepared for their next season of life, they’ve sought the counsel of financial planners.
With Baby Boomers needing financial services, we’ve seen a sustained increase in advertising from the financial services industry.
Between January and August this year, retirement services advertising increased 37% compared to the same period in 2020. Advertisers increased their ad spend from $489 million in 2020 to $671 million across digital, TV and print advertising.
This increase was primarily driven by TV advertising, which increased 54% year-over-year from $279mm to $431mm. Meanwhile, digital increased 33% and print fell 1%.
The increase in TV and digital isn’t surprising when considering demographics. The Boomer generation watches the most traditional TV compared to other age groups and the large majority use the internet.
Top advertising firms in retirement services include: Voya Financial, Principal Financial, Fidelity Retirement and Schwab Retirement.
Across all financial services, advertising spending increased 31%, from $2.7 billion to $3.5 billion this year. Other sectors which have seen growth are investment firms, debt management services and risk management services.
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