CHARLOTTE, N.C. (TheStreet) -- Andy Sieg, head of retirement & philanthropic services at Bank of America (BAC) - Get Report, described "a critical, transformative time in the world of retirement and benefits" during a speech this month at the SPARK National Conference , an annual event for the retirement services industry.
Seventy-six million baby boomers are getting ready to retire. About 43% of Americans say they have less than $10,000 saved for retirement. Almost a quarter of workers plan to postpone retirement and only 16% of workers are confident they are saving enough for retirement.
Rather than echo the doom and gloom of many in his field, Sieg sees long-term positives in how America is rethinking retirement. He spoke to
last week about his view of the changing landscape.
Is there a crisis ahead with so many baby boomers entering retirement in the next few years?
: I don't see this as a crisis. Before our eyes we are witnessing a redefinition of retirement. I think we are going to see, very quickly, that our old vision of retirement, where individuals stopped working at age 62 or 65, moved to Florida and spent 20 years on the beach or playing golf is about as modern and fashionable as a 1970s leisure suit.
If you go back to when Social Security was founded, the average life expectancy was not much older than the age at which you became eligible. With people living so much healthier, for so much longer, there really is a whole new phase of life being created. We are going to see what we used to consider retirement turn much more into a phase of renewal and it is going to have a wide-ranging societal impact.
This new definition of "retirement" must present a particular challenge for financial advisers and wealth managers.
The flip side of having so many options in terms of how these later years of one's life are spent is the need for advice that is broader and deeper than ever before.
We do a quarterly affluent investor study. In one of them we asked recent retirees whether, in the wake of the Great Recession, if they had it to do all over again, in terms of thinking about retirement, would they have spent more time focused on the numbers or more time spent on developing their personal vision for retirement. Over 50% said they wish they had spent more time on developing their vision.
The conversation really now begins with a much broader engagement in terms of how we can help our clients draw out and define the vision of how they would like to get the most out of these years what is feasible in terms of their assets and the income they may have coming from Social Security and pensions.
The more flexibility and more choices they have, the more intense the need for advice is. We see with the older edge of the baby boomers that one-third of them are members of the sandwich generation where they still have some financial responsibilities for aging parents as well as for their own kids. There are a lot more dimensions and
it requires more than the old strategy of finding out what they have saved, when they think they are going to retire, what their risk tolerance is and then just setting everything on autopilot.
What is the societal impact of this new approach to retirement, especially as older workers remain in, or return to, the workforce?
: This could be as transformational to our labor force as women entering the workforce in the 1950s and 60s.
I think you are going to see human resources departments become some of the most creative and innovative areas of companies as they wrestle with how to take advantage of this tremendous new source of intellectual capital and labor in terms of older workers returning. I am extremely bullish in terms of what that means for U.S. competitiveness and the economy.
Large employers should be well positioned to bring older workers into the labor force. There is an impetus for growth that's added because we have experienced workers who, in many cases, have a desire for more entrepreneurial activities and may invest and start new businesses. This is going to be a real growth driver, even if it will probably not be well understood for years.
-- Reported by Joe Mont in Boston.
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