Divorce among baby boomers and other generational differences are leading to a fundamental shift in how employers are planning retirement for specific segments of the U.S. population.
A clearer understanding of these changing demographics can help employers better support their workers in prioritizing savings and income security needs, said Robert A. Kerzner, president and CEO of LIMRA, speaking recently at LIMRAs annual conference.
How do we get through to them [employees] to make life insurance one of their priorities? he asks. How do we convince them to save more for retirement?
Multigenerational households have risen by 50% since 1980, Kerzner said, adding that single-family households have more than doubled since 1970.
Along with a growing decline in the number of households with children, Kerzner said that these trends are clearly not good for life insurance.
Gen Y in particular has a high number of obstacles preventing it from investing in life insurance and retirement, he said. Specifically, a high debt after college and low employment rates make it difficult for this generation to save.
We have to communicate differently to reach them, he said. As a media-savvy generation with less trust in institutions than previous generations, employers and plan sponsors must be authentic above all else, he added.
If we want their business, we need to earn their trust. We must be real, transparent and not over packaged, he said.
Recent LIMRA research notes is the most likely to get life insurance in the next 12 months. Additionally, Transamerica data suggest millennials are taking retirement savings more seriously than other generations.
Still, Kerzner says forward thinking is still important for employers and plan sponsors. Even boomers are changing, he said. Are we thinking enough about how theyre changing and the implications to our business?
In 1990, for example, only 10% of Americans older than 50 were getting divorced, he said. By 2009, that same figure jumped to 25%.
Among divorces for those between the ages of 40 and 69, women seek the split more than 66% of the time, he noted. On top of that, he said, older women are more frequently choosing not to live alone.
This is a fundamental shift in how we have to do retirement planning for a segment of the population, he says.
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