Jul 09 2010

Pre- and Post- Retirement Asset Portfolios


Is your credit union ready to manage the retirement assets of America’s largest generation? Pre- and Post-Retirement Asset Portfolios draws on the RAND Corporation’s Health and Retirement Study (HRS) to compare the asset-holding and selling trends between baby boomers and previous generations. The researchers examine important individual variables, like education, age, and family situation, along with multivariate factors to elicit the most important factors affecting asset holdings before and after retirement.

Credit unions that offer investment services should pay attention to these research findings that show consumers—especially higher-wealth consumers—maintaining direct stock holdings long after retirement. Although it’s tempting to think that members will unload direct stock holdings at retirement, it’s also far too simplistic a view.

As credit union membership continues to age, it will be increasingly important to cater to members’ actual behavior. And while this research suggests that the baby boomer retirement surge will not depress the stock market in a significant way, it’s essential to ferret out the individual needs of retiring members. Just as the real estate market affected homeowners in Nevada, Michigan, and Texas differently, retirees’ needs are driven by individual circumstances.

Report Number 213