Oldest Boomers Entering Retirement with Decreased Assets

January 18, 2011 (PLANSPONSOR.com) – The first wave of Boomers, those born between 1946 and 1955, are entering retirement with on average 12% fewer assets than they had four years ago.

According to the recently released Cogent Research 2011 Investor Brandscape report, as of October 2010, 1st Wave Boomers have an average of $708,000 in investable assets, including money from retirement savings, compared to the $809,000 this same group reported in October of 2006. While less affluent overall, 2nd Wave Boomers, ages 45-54, appear to be in better shape, since only 5% are currently retired, and as a group, average investable assets among 2nd Wave Boomers has grown by 10% since 2006.   

Cogent Principal John Meunier points to a movement last year among 1st Wave Boomers to lower risk investments as a factor that may have actually worsened their current predicament. “We saw a significant increase among older Boomers last year in allocations to lower risk investments just as the market was rebounding. Unfortunately, this only served to dampen their ability to regain losses sustained in the downturn,” he said in a press release. 

In contrast, 2nd Wave Boomers were helped last year not only by greater overall equity exposure, but also through renewed interest and greater participation in employer-sponsored retirement plans. Cogent found employer-sponsored retirement plan ownership among investors ages 45-54 increased from 79% in 2009 to 84% in 2010, and as a proportion of their total investable assets, money in retirement plans increased from 45% to 50% in the same timeframe.   

The report is based on a nationally representative survey of 4,000 affluent consumers with at least $100,000 in investable assets.