Baby Boomers Willing to Delay Gratification Now For a Better Lifestyle in their Golden Years

New MainStay Investments Survey Finds that 76 Percent of Pre-Retirees are Willing to Work Longer and Save More Today to Live More Comfortably Tomorrow

Aug 05, 2010, 09:00 ET from MainStay Investments

NEW YORK, Aug. 5 /PRNewswire/ -- The quest for "the good life" continues to drive Baby Boomers to sacrifice today, so that they can enjoy the finer things tomorrow.  According to MainStay Investments' Boomer Retirement Lifestyle Study, 76 percent of the Baby Boomers surveyed (age 45-65 that are not yet retired) say they are willing to spend less now to invest for a more comfortable lifestyle in the future.

"When it comes to lifestyle, Baby Boomers are redefining what constitutes a basic need and what they consider a luxury.  We have clearly expanded beyond the three traditionally thought-of necessities – clothes, food and shelter.  Our study aims to explore the things in life that are most valued, and to analyze what Boomers say they will do to continue to enjoy a more robust life in retirement," said Matthew Leung, director and head of practice management programs at MainStay Investments.

Forty (40) percent of the Boomers surveyed said they will have to delay retirement in order to afford the lifestyle they want to live.  Besides working longer, Boomers are saving more, adjusting their portfolio allocations, and seeking help from financial advisors—in that order.

What Do Baby Boomers Consider a Luxury?

According to the survey, the majority of Baby Boomers believe that healthcare coverage, internet connection, shopping for birthdays and special occasions, and pet care are basic needs. And about half of those surveyed consider annual family vacation or weekend getaways, having eldercare/home aid, professional hair cut/color and funding children/grandchildren's education to be basic needs as well.

"An interesting pattern that we noticed throughout the research was that as consumers age, things that were once considered luxuries are more likely to be considered basic needs--thereby reaffirming that Boomers essentially want it all," said Leung.  "In fact, almost half of consumers (47 percent) say they would downsize their home in retirement in order to afford these luxuries."

Outside of a select few traditionally "gender-specific" luxuries, males and females held similar attitudes towards needs and luxuries. When asked which luxuries would be the most difficult to give up, traveling and dining-out topped the list for both men and women.

"It was interesting that a Mars vs. Venus dynamic was not evident in the results as men and women generally applied similar relative values on the luxuries without material difference of opinion," said Leung.

Healthcare Costs are Biggest Threat to a Comfortable Retirement

Virtually all Baby Boomers (98 percent) said healthcare coverage is not a luxury, but a very basic need—and a need that they are extremely concerned about being able to afford.  Almost three- quarters of respondents (74 percent) rated healthcare costs as either their greatest concern or their second greatest concern.

"While a majority of consumers are setting aside funds specifically for future healthcare costs, a whopping 41 percent are not doing anything specific to save for healthcare, and will be relying on their retirement assets to cover healthcare and everything else," said Leung. "Given their lack of allocating pre-retirement income toward these looming costs, we find Boomers' actions do not always reflect their greatest concerns."

More than half (55 percent) of the consumers indicated they would rather work longer to pay for healthcare expenses, rather than give up luxuries in retirement.

Boomers' Attitudes Towards Retirement Strategies and Products

When it comes to asset allocation, Baby Boomers say they are willing to sacrifice a portion of their assets if it will help them achieve their retirement goals.  Eighty-four percent of consumers said that they would be willing to allocate a portion of their total assets in order to guarantee income for life. However, around half of the 84 percent said that they would only be willing to allocate a portion of their assets if the income was enough to cover both basic and discretionary expenses.

"The research indicates that an appetite for guaranteed income products clearly exists among this demographic," said Leung.

While consumers are making progress with regard to being open to products and strategies to help them achieve their retirement goals, more than half (52 percent) said they do not plan to consolidate their retirement assets and almost half (48 percent) are not even using a financial advisor— suggesting that Boomers may still have some work to do in terms of developing a solid retirement strategy.

"Given the longevity risk boomers face, our survey indicates that boomers could use some help in creating a successful retirement plan.  By working together with a financial advisor(s) to educate themselves on retirement income issues, and by planning and developing a consolidated retirement strategy, boomers can achieve the life they desire in retirement," concluded Leung.


The MainStay Investments Boomer Retirement Lifestyle Study was conducted online within the United States by Harris Interactive on behalf of New York Life Investment Management LLC, from May 3May 13, 2010 among 1,049 consumers aged 45-65 with a total of $100,000 or more of investable liquid assets who are employed and either a sole or shared financial decision maker. Data were weighted; a full methodology is available by contacting MainStay Investments.

This study was the second installment of the MainStay Retirement Income Studies.  The first was geared toward Financial Advisors, and conducted online by Harris Interactive, in December 2009.

About MainStay Investments

MainStay Investments is the advisor distribution arm of New York Life Investments, a top 30 global money manager(1)  with over $263 billion in assets under management, with its affiliates, as of March 31, 2010.  We deliver the investment products and expertise you've come to expect through: Multi-Boutique Management, offering access to leading institutional managers that drive performance; Proven Wealth-Building Tools, providing actionable and effective solutions to help invest and plan for all life stages; and a commitment to you.  We proudly stand on a track record of accountability, integrity, and commitment – a powerful combination in today's marketplace.


Allison Scott

New York Life Investments


"New York Life Investments" is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC.

(1)  Pensions & Investments, May 31, 2010.

SOURCE MainStay Investments