Successful 70-Year-Olds Give Advice to Baby Boomers in Inaugural Lincoln Long LifeSM Survey
Lincoln Long LifeSM Institute
Why are more independent-minded, affluent 70-year-olds seeking outside assistance in managing their nest eggs? According to the Lincoln Long LifeSM Survey released in October, "successful seventies" found that controlling their finances throughout their lengthy retirement has proved to be more complicated than they envisioned. Before they reached retirement, a majority (54 percent) of those surveyed had never thought about how many years they would spend in retirement. Another 43 percent estimated retirement to last 22 years. Research shows that people actually need to plan for a 25- to 35-year retirement.
Based on the results of a recent national poll by the Lincoln Long LifeSM Institute, it seems that baby boomers may be able to learn about potential pitfalls and glean retirement planning knowledge from an experienced source—their elders. In its inaugural year, the Lincoln Long LifeSM Survey asked affluent individuals in their seventies who have an income of at least $75,000 to reflect on their experiences and share important advice with pre-retirees about the financial and nonfinancial aspects of retirement.
"As a result of their increased life expectancies and shifting economic conditions, more successful seventies have sought the assistance of a professional financial advisor after they retired than during pre-retirement planning," explained Wes Thompson, CEO of Lincoln Financial Distributors. "The Lincoln Long LifeSM Survey found that less than four out of ten successful seventies had a primary financial advisor before they retired versus more than one of two who currently work with advisors."
New Retirement Planning Trends
The Lincoln Long LifeSM Survey suggests that those who turn to professional financial advisors develop more thorough and sophisticated retirement plans. While the majority (54 percent) of septuagenarians say they had never thought about how many years they would spend in retirement, those who had a financial advisor prior to retirement were more likely to have given thought to the length of their retirement (51 percent versus 41 percent). Additionally, compared to survey participants who do not have a financial advisor, those currently working with advisors say they are more apt to feel they have done a good job in overall planning for retirement (93 percent versus 83 percent), as well as planning for changes in economic conditions (79 percent versus 70 percent).
"At Lincoln, we have found that there is a real need for financial advice around retirement planning, especially to help seniors and baby boomers decipher the plethora of complex financial products on the market today," added Thompson. "Our affluent clients are looking for life insurance and investment products that can meet their long-term retirement needs, providing flexibility, upside growth potential, and assurances that their investments will remain safe over time.
Independent and Still Working
Although affluent 70-year-olds may seek advice for handling their money in retirement, it is most likely a means to an end—retaining their independence. According to the Lincoln Long LifeSM Survey, most successful seventies link their retirement happiness to the ability to be independent, a deep-rooted value of their generation. In fact, 94 percent of survey respondents say independence is a major source of satisfaction in their lives, followed by housing, health, financial situation, and time spent with children and grandchildren.
When compared to their generation at large, affluent respondents in the Lincoln Long LifeSM Survey illustrate a counterintuitive independent streak. They are twice as likely to have never stopped working. Looking at all adults age 70 and over, successful seventies are more than three times as likely to currently be employed as their peers. Moreover, three times the number of survey participants said they work because they like the intellectual stimulation, social aspects of the job, or enjoy what they do, as compared to those who remain employed because of monetary needs. One in six successful seventies who initially went into retirement ended up returning to the work force. In addition, more than six in ten survey participants who are still working report owning a business at some point in their lives (38 percent still do).
Leaving a Legacy of Advice
Despite the considerable assets accumulated by successful seventies—41 percent have a net worth of at least $1 million—they are decidedly focused on enjoying the fruits of their labor during their retirement years, and view leaving an inheritance as a lower priority. According to the Lincoln Long LifeSM Survey, a small number of survey participants, only 46 percent, say that leaving an inheritance or legacy is very important to them, and an even smaller number of respondents (36 percent) deem providing financial assistance to family members to be very important.
"Our survey results suggest that it's imperative to self-reliant, affluent septuagenarians that they do not end up being financial burdens to their relatives," noted Thompson. "And, in return, they seem to expect their adult children to adopt similar values and achieve financial success on their own."
On the other hand, successful seventies are generous with advice. To help steer their children onto the path of financial achievement, affluent individuals in their seventies offered much more guidance to their children than they received from their parents. Only 15 percent of successful seventies report getting advice on retirement planning from their parents, while more than four in five respondents provided advice on this topic to their children. The best advice that septuagenarians say they have passed on to the next generation is to be prepared by planning (25 percent). Overall, the counsel that survey respondents have for someone who is approaching retirement focuses on the "basics" of financial management. In advising a 50-year-old person, 21 percent say the single most important piece of advice is to have a plan; 19 percent say to save money in general; and 12 percent suggest investing wisely in 401(k) plans, IRAs, stocks or real estate.
Staying Young—and Healthy—at Heart
Successful seventies are remaining young at heart by keeping busy. The vast majority (84 percent) of those surveyed are married. Nearly nine in ten have traveled and 86 percent have made significant charitable contributions in the past year or two. Sixty-four percent have volunteered for one or more organizations, and approximately 40 percent cite volunteer activities as a major source of satisfaction in their lives. Seventy-eight percent of survey respondents report time spent with children and grandchildren as a major source of satisfaction, while hobbies (62 percent), attending or watching sporting events (31 percent) and taking classes in subjects that interest them (26 percent) also rank at the top of the list.
"We support our older clients in their ongoing quest to live independently and enjoy their retirement years to the fullest," concluded Thompson. "In fact, the Lincoln Long LifeSM Survey shows that 50 percent of successful seventies say the most important piece of nonfinancial retirement advice they want to give to baby boomers is to maintain a healthy lifestyle or stay active."
Can Money Really Buy Happiness?
The Lincoln Long LifeSM Survey indicates that the old adage, "Money can't buy happiness," may not always be true. Forty-five percent of successful seventies with a net worth of more than $750,000 report having no major life disappointments (of the six choices polled in the survey), as compared to 30 percent of less affluent survey participants. The survey defined disappointments as leaving behind close friends after a move, health affecting lifestyle, death of a spouse, losing touch with a child, retiring before being ready to stop working, and being forced to sell a business. Survey results also revealed a noteworthy relationship between the number of major life disappointments and the participants' marital status. More than twice the number of married participants experienced zero disappointments than those who weren't married.
About the Lincoln Long LifeSM Survey
Sponsored by the Lincoln Long LifeSM Institute, this survey was conducted by Mathew Greenwald & Associates, Inc., a research firm in Washington, D.C. The Lincoln Long LifeSM Institute is an organization within Lincoln Financial Group that recently has been created to conduct research, organize the intellectual capital of the company and work with external thinkers on retirement subjects relevant to baby boomers. The July 2004 telephone survey was conducted with 500 adults 70 to 79 years of age, who are financial decision makers for their households and who have household incomes of $75,000 or more, with a margin of error of 4.5 percent at the 95 percent confidence level.
