Delegate Resources February 27-March 1, 2002 Capital Hilton • Washington, D.C. Contents Section 1 The SAVER Summit Challenge . page 1 To educate, to persuade Section 2 Retirement Security . page 5 A national priority, a personal responsibility Section 3 The Millennial Generation in Youth . page 13 Living up to expectations of greatness Section 4 Generation X in Rising Adulthood . page 19 It’s a matter of survival Section 5 The Baby Boom Generation in Midlife . page 25 Who are you calling middle-aged? Section 6 The Silent Generation in Elderhood . page 31 From rags to riches References . pages 38, 39 The opinions expressed in this publication are solely those of the authors. The International Foundation of Employee Benefit Plans and U. S. Department of Labor disclaim responsibility for the views expressed and statements made herein. Published in 2002 by the International Foundation of Employee Benefit Plans, Inc. ©2002 International Foundation of Employee Benefit Plans, Inc. All rights reserved. Printed in the United States of America SECTION 1 The SAVER Summit Challenge To educate, to persuade ongress enacted the Savings Are Vital to Everyone’s Retirement (SAVER) Act of 1997 to advance the public’s knowledge and Cunderstanding of the importance of retirement savings. The act requires the U.S. Department of Labor (DOL) to maintain a public out- reach program and hold three bipartisan national retirement savings summits. The objectives of the national summits are to ✦ Advance the public’s knowledge and understanding of retirement savings and its critical importance to the future well-being of American workers and their families ✦ Facilitate the development of a broad-based, public education program to encourage and enhance individual commitment to a personal retirement savings strategy ✦ Develop recommendations for additional research, reforms and actions in the field of private pensions and individual retirement savings. The first National Summit on Retirement Savings convened for two days on June 4 and 5, 1998 in Washington, D.C. Delegates identified barriers individuals face in saving for retirement and employers encounter in helping workers save. The central theme that emerged from the delegates’ work was the strategic importance of retirement savings education, which will be the focus of the 2002 Summit. The 2002 National Summit on Retirement Savings will be held in Washington, D.C. February 27 through March 1, 2002 at the Capital Hilton. President Bush, the Speaker and Minority Leader of the House of Representatives, and the Majority Leader and Minority Leader of the Senate are co-hosts. Approximately 250 statutory and appointed delegates will participate in the Summit. The statutory delegates include the Congressional lead- ership and officials of the executive branch. The 200 appointed dele- gates, half appointed by President Bush and the Republican leaders in Congress and half appointed by the Democratic leaders in Congress, are a diverse group representing state and local governments, profes- sionals and other individuals working in the fields of employee bene- fits and retirement savings, private sector institutions including employers, the general public and members of Congress. The common goal of the 2002 Summit delegates is to help all Americans retire with security and dignity. To help accomplish this goal, the Summit challenges delegates to produce action plans that specify the most important and compelling messages and to explore the best approaches and partners for delivering those messages to their intended audiences. Section 1: The SAVER Summit Challenge 1 Action Plans The most successful approaches must both inform and persuade in order to change ideas, attitudes and behaviors. Public education informs, but social marketing persuades. The distinction recognizes the difference between what a person knows and what a person does. Awareness and understanding that come from education can and often do influence behavior, but sometimes knowledge alone is insuffi- cient. Many people, for example, fail to regularly exercise although fully aware of the health benefits. In the same way, financial literacy does not guarantee commitment to a personal retirement savings strat- egy. The American Savings Education Council (ASEC), for example, determined through a survey in 1999 that although youth who had taken a financial education course felt more knowledgeable, their behavior and habits were basically the same as those who had not taken such a course. “We must do a better job . To be persuasive, the action plans should borrow the successful tech- of educating the public— niques used by commercial marketers to sell products and services— employers and individuals alike— a practice already used widely to address public health issues. about the importance of saving One of the most successful techniques is segmenting the audience and about the tools available to ensure that we can afford so campaigns can be directed to and tailored for specific groups, based to retire and remain financially on the demographics and psychographics (values, life styles, etc.) of independent.” the group. Understanding the different attitudes, behaviors and concerns that Final Report, 1998 National Summit are shaped by generation and life stage is a good starting point for on Retirement Savings. designing and improving retirement savings campaigns. Summit dele- gates will target four groups, called cohorts, identified below by their generation, life stage and approximate age. Generation Life Stage Approximate Age A Millennial Generation Youth Under 20 B Generation X Rising Adulthood 20s and 30s C Baby Boom Generation Midlife 40s and 50s D Silent Generation Elderhood 60s and 70s This segmentation by generation and life stage was adapted from the 1 work of William Strauss and Neil Howe. The age boundaries between generations and between life stages, and their labels, do vary from expert to expert, but the underlying principles are the same. A generation is a group of people who are born over the same time span and who share a collective personality. The personality of each generation—those common beliefs and behaviors forged in youth— shape attitudes toward work, family, life style, money, retirement and the future. For example, members of the Silent Generation were influ- enced directly or indirectly by the Great Depression and share a collec- tive approach to money that is cautious. 2 2002 NATIONAL SUMMIT on RETIREMENT SAVINGS/Delegate Resources Recognizing that different generations have different collective per- sonalities can improve action plans by reaching out in ways that appeal to each generation. The generations are briefly described below with their birth years and some key characteristics. ✦ The Millennial Generation (1982 to approximately present day) grew up sheltered by parents during America’s longest economic boom. Millennials are group-oriented, pressured and conventional. ✦ Generation X (1961 to 1981) grew up criticized and on their own. Xers are politically disengaged, in debt, economic populists and family-oriented. ✦ The Baby Boom Generation (1943 to 1960) grew up indulged in a period of optimism and opportunity. Boomers are activists, youth- oriented, informal and a dominant market force. ✦ The Silent Generation (1925 to 1942) grew up overprotected and suffocated during world depression and war. The Silents are self- reliant, frugal, adaptive and patriotic. A life stage is a phase in the human life cycle that is correlated with age and defined by a central social role with its concomitant pursuits and concerns. Each life stage brings new opportunities and challenges for retirement savings campaigns. The life stages are described below with their approximate ages. ✦ Youth (under age 20) is about learning and preparing—for work, for citizenship and for life. ✦ Rising Adulthood (20s and 30s) is about building—relationships, families and careers. ✦ Midlife (40s and 50s) is about leading—raising children and guid- ing institutions. ✦ Elderhood (60s, 70s and beyond) is about reflecting and steward- ing—passing on values and channeling endowments. Generations move through each life stage. The close alignment in 2002 of the four generations with the four life stages is a powerful com- bination that Summit delegates will use in creating their action plans. The intended audiences for the action plans are moving targets. The needs of each generation will change as they move through successive life stages, and the characteristics of life stages themselves will change with each new generation. For example, the needs of the Baby Boomers will change as they enter elderhood and at the same time they will redefine what it means to be an elder. Americans could be segmented in many other ways, including gender, race, ethnicity, education or income. However, surveys have found that attitudes toward retirement savings are generally comparable across gender, racial and ethnic lines at comparable income levels. The more conservative investment style of women is one of the more notable exceptions. Any approach that attempts to categorize people must recognize the diversity that exists within any segment. Using generations and life stages to help create action plans does not presuppose uniformity, only meaningful similarities among people based on generation and life stage; nor does this approach intend to dismiss real differences in income and wealth that directly affect retirement savings. Section 1: The SAVER Summit Challenge 3 In fact,