Does Your Strategy Cover The Greatest Transfer of Wealth in U.S. History Coming Over the Next 20 Years?
Estimates between $50 Trillion to, most recently, $90 Trillion in assets, which is more than 3x the U.S. GDP, are expected to be transferred from Baby Boomers to their descendants over the next two decades. If those descendants are Millennials and Gen Z, this could be great news because of their high levels of debt. But, this expected transfer can be extremely disruptive to everything from supply chain to labor economics to housing, and more. And, if Baby Boomers rely on transfer of wealth after their deaths, that can mean a significant chunk goes to “death taxes.” So, if your company’s strategy hasn’t accounted for this upcoming disruption, we have some ways to think about it and what it could mean for your digital strategy.
Providing financial planning for retirees
When it comes to planning, few people like to think about their own deaths and how to build a transition plan that sets their families up for a better path forward. But, from personal experience, when my father died of a stroke when I was only 28 years old, I know what it’s like to be on the other side of a parent’s death and to be left shouldering the burden of funeral costs, helping my mother sort through piles of paperwork, and making decisions that I never imagined I would have to make. Although this article is centered around the aging population with assets to pass down to younger generations, it’s important to keep in mind that this is not all, not even the majority of Baby Boomers. According to Small Business Trends, “45% of Boomers have no retirement savings at all.” So, before we get in to strategies for those who do, just keep in mind that almost half of your Baby Boomer members may have no retirement savings, so offering them financial planning services now could help them and their families in the future.
Source: Pew Research Institute
Now, whether Baby Boomers have a little or a lot of savings, here are some important statistics you can provide them to help them think about how long those savings have to last:
The number of U.S. centenarian population has tripled just in the past three decades, and it’s expected to more than quadruple over the next three decades, growing from ~101,000 in 2024 to 442,000 in 2054.
Currently, the percentage of U.S. population 65 and older comes to 18% of the population, but in 30 years, that number is expected to grow to 23% of the population—and that’s while birth rates continue to decline, skewing the U.S. population to older adults.
The current life expectancy is the U.S. is 79.25 years, and although it declined for a bit during the pandemic, that number is climbing back up.
As of 2024, women make up 78% of centenarians. Women outlive men by an average of 6 years.
Over the past 20 years, long term care costs have increased 60%
For that same period, “healthcare expenses for a retired couple has increased 88%—reaching $300,000”
What this means is that although reports are coming out about this transfer of wealth, no one knows how long they’re going to live or how much money they’re going to need. Which makes it all the more important to help your members understand the realities they’re facing and help them build the plans to give them the post-retirement life they want and to build the plans to help them transfer assets to younger generations as part of a long-term wealth-growth strategy.
Providing financial planning for Gen X, Millennials, and Gen Z
For many, particularly older generations, money was taboo subject which created a sense of mystery and fear about money: How to make it, invest it, and keep more of it. Now, with so much information available on the internet, some of the younger generations, are taking advantage of everything from short Tik Tok videos to online financial literacy programs. But, the problem with searching online is that you really don’t know who to trust, and particularly with Gen Z, they are very skeptical of being sold to. This is where credit unions and regional banks may be able to intersect with the needs of younger generations and help them become savvier and financially healthier now, so that when, and if, their parents and grandparents provide them an inheritance, they know how to invest it wisely and use it in a way that builds a stronger, healthier future for them over the span of their lifetimes.
In our post on the upcoming retirement of Baby Boomers, we provided some sobering statistics about Millennial and Gen Z debt and how credit unions and regional banks can provide programs to help them. Because 79% of Millennials and 66% of Gen Z live paycheck-to-paycheck, they can benefit from the products and services of credit unions, but they’re just not aware of what’s available to them. At 4% for Gen Z and 5% for Millennials, they don’t even account for 10% of membership in credit unions, combined. But, how can credit unions and regional banks reach them, when they typically operate within a small radius and/or are affiliated with specific employers?
By reaching out to your older members.
Building a multi-generational digital strategy
You know your members. But, how well do you know the members you could have, and should be targeting right now? There are many different ways to build omni-channel marketing programs. But, for the purpose of this post, we’re going to focus on one way you could build a digital strategy that delivers new value to your existing members who are older generations, and grows your membership with younger adults who are going to be the majority of the U.S. labor force in just 6 years and may be the recipients of Baby Boomer wealth transfers.
Start with the members you have
By starting the conversation with members of the Silent & Baby Boomer generations (and potentially even Gen X who are much more comfortable having family financial conversations than older generations), you can help them understand what their children and grandchildren are facing. You can introduce them to programs built for younger generations and create the bridge that helps families have difficult, but necessary, conversations. When they come into your branch, draw their attention to programs, products, and services you’re offering and ask them about their children and grandchildren. Provide information delivered in various formats, channels, and marketed to very different audiences, so that your message connects to the intended audience in a way that engages them. This is where your multi-generational strategy begins, and it should include the following components:
Research-based personas for each generation with research gathered from:
Your existing members which can be gathered from quantitative data as well as interviews and focus groups
Trusted data sources, such as Bureau of Labor Statistics, Census Bureau, third-party researchers, and more
Non-member focus group participants who represent various demographics
Content strategy built for each persona which details:
What matters to them and the messages to connect to those areas
Audience analysis to provide appropriate voice & tone for each persona
Content (copy, imagery, videos) which aligns to the audiences you’re targeting thru various channels, and meets accessibility guidelines
Content mapped to each persona and each channel, and planning for hand-offs from one channel to another, one audience to another, to ensure that you’re creating what feels like a unique, personalized content experience while simultaneously layering the information across personas
Information architecture & user experience design for your digital experiences which aligns to your goal of capturing new audiences
Persona-based offline and online campaign strategies aligned to:
New audiences you’re targeting for engagement
New products, services, and digital experiences you’re launching
New, external changes happening in the economy which may create a sense of urgency in members and non-members
This is just one way you can approach how you’re thinking about the members you have, the new members you want, and how your current marketing strategy may not be enough to build your business for the changes coming in the very near future.
To learn more about changes coming with Baby Boomer retirement, see our post, “As Baby Boomers Retire, How are You Protecting Your Business by Building Products & Experiences for Younger Generations?”
To learn more about how we may be able to help you build your membership, contact us.