The stats have arrived- survey results from insurers and researchers have one thing in common: Baby boomers are not prepared for retirement, and therefore insurers could be missing out on business. Some companies are stepping up, using technology to capture this pending market.Allstate's 2006 Retirement Reality Check survey reveals that 40% of Americans admit they are not saving seriously for retirement. One unexpected finding, according to the survey, is that Generation X respondents (those born from 1965 to 1978) are more likely than their elders to describe themselves as financially independent-73% of gen-Xers compared with 67% of baby boomers.

Even affluent baby boomers need help. Almost half of affluent (minimum of $250,000 in investable assets and/or $150,000 household income) baby boomers have never discussed their needs for retirement with a financial adviser, according to results from a survey conducted by the Phoenix Affluent Marketing Service (AMS). Thirty-six percent of older baby boomers, age 50-59, with an average net worth (not including primary residence) of $1.7 million, plan to retire in the next 6-10 years and 28% plan to retire in less than five years. Of those planning to retire, 62% do not have a written financial plan for retirement, and 27% have never met with a financial adviser to discuss their needs for retirement.

So, what does this future group of retirees need to prepare? According to industry experts and those with a vested interest in this growing market, education is key to preparation. A New York Life Insurance Co. survey reveals that 10% of Americans understand how much of their retirement savings they can spend each year without running the risk of outliving their assets.

Nearly half of the Americans surveyed between the ages of 41 and 92 overestimated this safe withdrawal rate, which experts benchmark at 4% annually for the typical retiree, according to the survey. Forty percent of respondents admit they do not know how much to withdraw without spending down their savings.


New York Life takes on the task of educating consumers with a Web site,, directed at retirees.

"The underlying logic and motivation behind the site was to make it educational," explains Kevin O'Fee, managing director of New York Life Investment Management. "It's about the process and identifying the issues people need to understand to create a retirement income strategy based on their needs."

The site, which went live in April, is broken down into three sections. One section, Retirement Challenges, provides results from its survey and other articles pertaining to problems consumers may face when planning for retirement. A second section, Guaranteed Lifetime Income, contains an interactive quiz, which tests user knowledge on retirement income. And the third section provides related articles and online calculators.

Though the Web site is still relatively new, O'Fee says, it has gotten a lot of traction, especially relative to New York Life's other Web sites.

O'Fee stresses the goal of the Web site is to provide education, but "we're hoping that if people see this and find it compelling and recognize it's New York Life providing this type of insight, they might consider working with New York Life and one of our agents," he says.

New York Life is still mining information from its survey that will ultimately aid its education distribution through the Web site.

"Our intent is to continue to use the 'guarantees matter' name as a way to deliver that information as we again dig down into that data," says O'Fee. "So this would be our forum on a go-forward basis with respect to our advocacy process around retirement income."


Massachusetts Mutual Life Insurance Co. (MassMutual), headquartered in Springfield, uses customization and technology to educate customers and encourage them to enroll in company-sponsored retirement plans.

When MassMutual holds an enrollment meeting at a company worksite, each attendee uses a secure handheld device, called an e4, that communicates wirelessly with a laptop, operated by a MassMutual communication specialist. Each hand-held device can retrieve a participant's password-protected information and plan-specific data, such as sources of retirement income, target retirement year and investment options, enabling the participant to make highly personalized retirement decisions.

The communication specialist uses the e4 system to deliver a customized education presentation that is synchronized to the handhelds, ensuring that all participants are receiving the same educational message at the same time. This allows each participant to take immediate action when prompted. Participants follow along and make elections by touching the screen with a stylus. The information they enter is retrieved wirelessly, in real time, enabling the communication specialist to address questions as they arise.

This device was in the pilot stage when INN reported on it in May 2005 (See "Ian Sheridan Wants To Change the World"). But it went into full production in July 2005 and has increased enrollment in retirement plans, according to Sheridan, vice president of marketing and business development for MassMutual Retirement Services. In MassMutual studies, using the handheld device resulted in average enrollments of 90%. And, 24% of active participants increased their contribution levels. MassMutual was even awarded the No. 1 ranking in 2006's InformationWeek 500 Wireless Innovation category for its e4 wireless enrollment technology.

MassMutual takes customization even further with its Prepared USA platform-of which e4 is an extension. Prepared USA is a behavioral approach to investor communications. It integrates general personal information that is relevant to retirement planning, such as age and salary, as well as a participant's employer's plan offering to provide options and recommendations, allowing participants to make sound decisions, says Sheridan.

MassMutual also completed extensive research, surveying about 3,000 Americans about behavior and attitude-why they do or don't take certain actions as they relate to financial instruments and retirement planning, says Sheridan.

Using that information, along with information from observing its million-plus customers, "We developed targeted personalized behavioral messages or campaigns if you will-to talk to folks and encourage them to take the right set of actions and to save more as well as to save and allocate their investments the right way," says Sheridan.


Allstate Insurance Co., Northbrook, Ill., also takes steps to encourage its customers to plan for retirement. On its Web site, Allstate offers online calculators and general educational information-what an IRA is, life insurance details, what comprises a mutual fund, etc.

"We've tried to provide and arm people with basic information about (retirement) planning," says Craig Oldham, marketing director at Allstate. "Calculators are a big part of that for us because they start to put it in context for the consumer and their personal situation."

But, education responsibility lies with its agents and representatives, says Oldham. "When it comes to (retirement planning) that (preparation) education is great, but it's very difficult to explain online as opposed to talking to a real person," he says.

Allstate provides its exclusive agents and personal financial representatives (PFR) with their own personalized Web sites to communicate and assist Allstate customers on a more personal level. One new feature on these Web sites is a series of consumer workshops-some that are focused on retirement planning.

Allstate customers can also start or preview a personal financial review process online, says Oldham. "It gives (the customer) a checklist of things to bring in when meeting with the agent, and from there the agent provides them with training, depending on their individual needs."

The personal Web sites have been a success, according to Oldham. "We're an agent-based network - 13,000 exclusive agents and Allstate PFRs - and we do get a significant number of hits, especially on the financial side. And as their needs get to be a little more complex than simply buying auto and home insurance, they're certainly going to gravitate toward talking to someone live," he says. When they do, the agent's or PFR's contact information is right there in front of them.


In August, President Bush signed the Peension Protection Act of 2006, which requires companies with under-funded traditional pensions to pay up, and ensure that most pension plans become fully funded within seven years, beginning in 2008.

A provision in the law enables companies to automatically enroll workers in 401(k) plans, with default contribution levels that increase on a regular basis.

MassMutual, Springfield, Mass., has been tracking the law, and took steps to benefit from it with a homegrown service connected to its Prepared USA platform based on behavioral analytics. MassMutual RetireSmart is a set of automatic features employers can use to automatically enroll employees to a default amount set by the employer and provide the employee a target maturity fund. "We want to make it easier for employers to use those kinds of feature sets," says Ian Sheridan, vice president of marketing and business development for MassMutual Retirement Services. "Those types of auto features along with a behavioral approach really are what's going to make the difference."

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