ZOOMER U VICE PRESIDENT DAVID CRAVIT WAS RECENTLY INTERVIEWED ON THIS TOPIC ON ZOOMER RADIO. LISTEN TO WHAT HE HAD TO SAY.
The word “retirement” carries with it an either/or: you were working and then you stopped.
Traditionally, this happened at age 65. The model was straightforward: you entered the workforce in your young 20s, working for forty years or so, stopped at 65 and lived off your accumulated savings and pension until your death, which usually came about 10-15 years later.
Today that model is disappearing. More and more Zoomers are not retiring “on schedule” at 65. The trend is unstoppable because several different forces are exerting themselves all at the same time. It’s a perfect storm, in a sense, blowing away either/or retirement:
- Radical longevity – Today a reasonably healthy 65 year old can look forward to 20 years or more of life span…and we’re just getting started. The fastest-growing age group, in percentage terms, is centenarians. If you stop working at 65 and you need to fund 20, 25, 30 or more years ahead, this dramatically increases the burden on your accumulated savings/pension package. Where will the money come from?
- Underfunding – The Baby Boomer generation is seriously underfunded. About half of Canadians in the immediate pre-retirement age group (55-65) have no company pension. Only a third have savings and investments (excluding their home) of $100,000 or more. If income disappears at 65, the pension/savings package won’t be enough.=
- Low interest rates – Even for those with substantial accumulated savings, today’s relatively low interest rates means those savings won’t throw off a meaningful ongoing cash flow. More cash is needed to sustain longer life spans, and it can only come from continuing to earn an income in the workforce.
- Baby Boomer attitudes – Fortunately, Baby Boomers (at the moment the largest sub-group among the total Zoomer population) have a strong work ethic — too strong, according to some critics. Even without financial pressure to keep earning, they’re reluctant to exit and become inactive. Work means engagement, and engagement means better health. “Retirement” means retreat and, for many Boomers, a reduction in importance.
- The gig economy – Also, fortunately, the workplace increasingly enables part-time, free-lance, and flexible income-earning solutions. It’s more and more possible to earn an income without working full-time. With age comes downsizing, so expenses fall and the income doesn’t need to equal 100% of what was generated in the peak years. Thus, “hybrid” — retiring from a “regular” job and developing part-time solutions, often working from home. In 2008, a total of 1,285,000 Zoomers (45+) had a home office. Of these, 79,000 were over the age of 65. Today, the number has more than doubled: 2,815,000 Zoomers have a home office. But the number who are 65+ has skyrocketed to 617,000 — nearly a tenfold increase.
What does it all mean for marketers? In a word — engagement. If the Zoomers are not retiring at 65, it means they’re active — and that includes, active as consumers. While it’s important to understand Zoomer Nation quantitatively— their overwhelming dominance in the market in terms of wealth and spending — it’s just as important to understand them qualitatively. They have redefined and re-invented so many aspects of “ageing” — from physical to attitudinal to sexual — and now they are recreating an entirely new model of “retirement.”