Boomers Unfazed By Scare Tactics

First in a series on economic, cultural and psychological factors that drive retirement investing by baby boomers.

Baby boomers typically don’t respond well to criticism - constructive or otherwise - and they habitually filter out bad news, says a new study on investing for retirement.

“Roughly 70 percent of boomers describe themselves as optimistic,” reports study director Dr. Christopher Hayes.

“Translated,” says the psychologist, “this means they hear the up side of what they are doing to prepare for retirement - but not the down side.”

Hayes is professor of psychology and executive director of the National Center for Women and Retirement Research at Long Island University’s Southampton College.

The Scudder Kemper Baby Boomer Generation Poll studied more than 1,000 persons nationwide born between 1946 and 1964 with incomes over $30,000. It found boomers “are open to helpful suggestions on how to plan for retirement.”

But they won’t be browbeaten into saving by members of the investment industry. Cajoling is the better strategy.

“Owing to this generation’s unprecedented numerical and economic clout, they are accustomed to feeling in control, whether in fact they are or not,” Hayes explained in an interview. (Indeed, the study debunks the myth that boomer savings drive the bull market. More on this below.)

“Many financial services companies,” Hayes said, “employ the voice of doom to get boomers to invest, telling them there is no way they will ever be able to retire. But because so many boomers ignore negative messages,” says the psychologist, “attempts to scare them into action are not the most effective way to communicate with this group.”

That has been my experience, as well, at workshops on investing for retirement. A not uncommon response is, “I’d have to save more than I even make to ever retire,” or words to that effect.

Says Hayes, “The key to helping boomers is listening to their psychological, as well as economic, needs.”

Survey results paint a picture of a generation that is very “self focused” and “youth fixated,” Hayes said. “Most boomers are emotionally younger than their chronological age,” he added. “Half say they feel 10 to 20 years younger.

“Reaching this group entails depicting boomers as youthful - by portraying people they want to relate to,” Hayes says. “What boomers will not relate to are withered and worried people. Boomers don’t want to think of getting old. Nor do they think of themselves as traditional retirement candidates.

“Their motto is, ‘Don’t bother me now - I have a life to lead.”’

And the notion that boomer savings are driving the bull market, “is completely unfounded,” insists Maureen Allyn, managing director of Scudder Kemper Investments Inc.

“The real force behind current market levels is actually the corporate sector,” said the chief economist of the worldwide investment giant. “The driver is not boomer savings, but the mergers and acquisitions mania of the past decade and stock buy-back initiatives,” she said in an interview.

Even so, boomer culture perpetuates the myth of a stock market that is this generation’s passport to security. But expectations which envision a neverending bull market are extremely scary, admits the investments analyst.

“A thinking person,” Allyn cautions, “has to be concerned when all the news is good.”

Fortunately, on a more practical level, fully two-thirds of boomers surveyed are planning for some kind of post-retirement employment. One in five plans not to retire at all.

Unfortunately, these expectations clash with corporate management practices and government policies which penalize older workers.

“Few corporations have adopted older worker programs,” says Hayes, “and there is a general lack of attention being paid to how employers will address the siege of baby boomers who will require jobs.”

, DataTimes MEMO: Associate Editor Frank Bartel writes on retirement issues each Sunday. He can be reached with ideas for future columns at 459-5467 or fax 459-5482.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review

Associate Editor Frank Bartel writes on retirement issues each Sunday. He can be reached with ideas for future columns at 459-5467 or fax 459-5482.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review

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