More Retirees Working Through Retirement Years Means Retooling Financial Services

SAN FRANCISCO – With nearly 5.3 million Americans shifting in and out of retirement, the line between work and leisure continues to fade and `retirement’ takes on another meaning. More than 60% of Baby Boomers say they’ll work in retirement, many forced to do so because of rising health-care costs, unprepared retirement portfolios or for some, just choosing to stay more active, according to a report by SRI Consulting Business Intelligence, a research and consulting company. Some industry watchers have coined the shifters `revolving retirees.’ As a result of the new definition of retirement, companies selling financial products – from annuities to life insurance to credit instruments – need to retool their offerings to satisfy a new breed of retiree, according to the study. “Retirement products were all built with an understanding of retirement as if it was this line in the sand,” said Larry Cohen, director of the consumer financial decisions group at SRI Consulting told CBS MarketWatch. Experts suggest having a product that has flexibility built in to attract retirees. For instance, financial services companies might offer an annuity product with a flexible payout option allowing investors to raise or lower annuitized payments in mid-disbursement. Financial advisers also need to educate themselves on how to counsel seniors who, for instance, may seek a line of credit to launch a new business. Cohen said the traditional retiree probably didn’t have a lot of need for credit, but the revolving retiree periodically may need credit to start a business or to fund an endeavor or a project, and they don’t want to use their other assets. “Current (advice) services touch on being retired or on overall plans, but since this is a different life stage, it needs to be thought through from the vantage point of people in that life stage,” Cohen said. Some insurance companies are already considering flexible long-term-care products, such as a life insurance policy or an annuity that can be transformed into a long-term-care policy if need be, said Brian Perlman, vice president of Matthew Greenwald & Associates, a market research company focusing on the financial-services industry.