Baby boomers reach retirement
Starting Saturday, more than 10,000 baby boomers will reach retirement age each day for the next 19 years. That’s the good news for industries such as recreational boating, which have for a long time been looking to this generation as a lucrative source of customers.
The bad news, however, is that many boomers will reach their golden years without that large nest egg of discretionary income. The “typical baby boomer is still woefully short on retirement savings,” according to an Associated Press story this morning.
Only 15 percent of private sector workers still have company pensions, down from 39 percent in 1980, and, while 42 percent do have 401(k) accounts, many invested in the stock market and haven’t realized the returns they had hoped. Throw in the drop in home prices, and the fact that nearly three in four people file to claim Social Security benefits when they reach age 62 – locking them in at a lower amount than if they would wait – and times could be tough for some of these new retirees.
Still, given the fact that 76 million Americans were born between 1945 and 1964, this is going to be a huge pool of people that now have more time to pursue recreational activities, and there are going to be plenty that do have money to spend on products like boats. But how that will translate into increased sales remains to be seen.
Nice article Jon. A couple of points that came to mind as we continue our slow (and hopefully steady)economic improvement:
1) The boating industry is here to stay; the numbers are different and we will continue to do business in a new reality — still big numbers producing good slices of economic pie.
2) There’s a lot to like about Gen Y (and Gen Z, too) — let’s make sure they are engaged/excited about boating.
3) We knew the boomers had retirement savings & pension issues – before the financial crisis/loss of home equity. The crisis exacerbated it.
4) True, the boomers will have more leisure time and it’s still a big demographic; be aware they will be in different size & types of boats than we originally thought — and will be lured by other recreational competitors. (This topic is a sales seminar all on it own!).
Although the baby boomer group have a lower income then the past I believe the industry will still greatly flourish from them. I think personally smaller boating and marine industry sectors that sell niche products and accessories will be the biggest gainers here. I think more people will be upgrading their current boats adding onto them rather then purchasing new boats. I know personally from clients I have worked with that there sales of used boats far outweigh new boats this year. Large boating manufacturers will probably be taking a big hit in 2011. I know Malibu has already began to see a lower amount of sales in their boat shows.
Great article Jon! It brings up a lot of questions for our industry. I don’t necessarily think that the baby boomers will be the main demographic of boating industry sales.
I agree with Jim, the boating industry is here to stay. Even in tough economic times, people will find a way to get on the water even if it is budget boating.
More and more people are becoming interested in boating, and the age of the average boater is dropping tremendously. Living in Michigan, the state with more registered boats than any other state, it is easy to note and document the age of the average boater dropping just over the past four years.
Due to the baby boomers taking the largest hit from the economic decline, I think that target market will be focused on buying smaller boats and more on the used market.