If you’ve opened a paper, turned on the news, or looked at a website in the past few months, then you’ve seen the headlines. It’s doom-and-gloom for baby boomers and pre-retirees, who seem to be ill-prepared for the retirement that’s waiting for them in just a few short years.

But it’s not as bad as it seems. Companies are changing their product lines to meet the needs of baby boomers, and many are providing new educational opportunities to help customers prepare for a safer future.

Boomers in crisis

According to a recent poll by the Associated Press, 44 percent of baby boomers have little or no faith that they’ll have enough money when their careers end.

John Guido, division vice president of product marketing at ADP Retirement Services, said there were a couple of factors contributing to this lack of confidence.

“First, saving too little,” he said. “Second, getting started later than they should have, and third, spending too much. It all boils down to a clear lack of understanding.”

The financial crisis also had a hand in knocking baby boomers off their financial footholds, said Mark D. Scalercio, senior vice president and head of Employer Sponsored Business at AXA Equitable.

“The financial crisis put a lot of participants into action,” he said. “Before that they were sort of inactive, until they looked at their balances and realized their 401(k)s were [more like] 201(k)s.”

Elaine Sarsynski, head of MassMutual's Retirement Services business, said that boomers also thought Social Security and defined benefit plans would be there for them in retirement, but that’s not the case anymore.

“There’s been a significant sea change in the traditional defined benefit plan and Social Security,” she said. “Now there’s a drive towards taking charge of your own retirement, instead of letting the corporation do it for you in a defined benefit plan.”

Calculating need

Another issue is that many pre-retirees simply don’t know how much they’ll need in retirement. Sarsynski said she was recently giving a seminar, and asked everyone in the room how many of them had actually calculated the adjusted income they’d need in retirement. Only one person raised their hand.

To combat this lack of education, many companies are providing tools that will make it easier for plan participants to calculate their retirement income need and see what adjusting their contributions will do to their retirement savings goals.

MassMutual, for example, recently launched the RetireSmart Ready tool. This interactive application allows users to log into a website, adjust a few variables, and the tool will calculate the participant’s likelihood of success in retirement.

In the summer, MassMutual is launching its PlanSmart Analysis, which takes the participant level information and rolls it up to the plan sponsor so they can monitor the success of their entire enrollee plan.

“It gives the sponsor the opportunity to say, ‘Oh my goodness, only 30 percent of my participants have a chance at success in retirement? I don’t feel good about that.’” Sarsynski said. “So they can change their plan design, move the dial and begin to fix the situation.”

AXA Equitable also has a retirement planning and education tool, which can be tailored to an individual's behavior, age, and career stage. They’ve partnered with vWise in order to create a fully integrated online portal which allows them to plan their asset allocation, savings goals, etc.

“It’s guided by an interactive video, which uses smart technology so it will stop you if it sees you’re having trouble,” Scalercio said. “It’s very intuitive in nature. We’re happy to have it.”

Products geared to boomers

In addition to the calculators available, companies are also working hard to create new products aimed at boomers, and to market the existing ones that would be beneficial to pre-retirees more aggressively.

At ADP, the auto features have been particularly helpful in getting people to their retirement goals. ADP offers an auto-pace feature, so that as a participant’s income grows, the contribution automatically grows, too, and an auto-rebalance feature. And of course, they offer an auto-enrollment option.

Putnam is about to launch a product line created specifically for baby boomers, which should be available mid-summer. The funds are absolute return funds, which are mutual funds that promise a return in any market condition. Robert L. Reynolds, Putnam's president and CEO, said in a press release, "We are seeking to address the breadth of retirees' ever-changing lifestyle income needs and full range of risk tolerance by offering clear guidance on withdrawal rates that can be adjusted regularly, as markets and their own life circumstances change."

AXA Equitable is trying to work more with small and mid-size businesses to provide them the type of products larger companies can get. Their Retirement Gateway is a comprehensive 401(k) product offering with diverse investments and fund scrutiny.

Scalercio said that plan sponsors are often too busy running their day-to-day businesses to spend a lot of time monitoring their investments. AXA Equitable works with a third-party, Wilshire Associates Incorporated, to monitor investments.

For many boomers, though, getting guaranteed income through retirement is the key. Scalercio said AXA Equitable currently offers, in the individual market, variable annuities with guaranteed income (their Retirement Cornerstone product). They are hoping to offer a 401(k) with guaranteed income sometime in the future.

”We have some early thoughts on this, and we’re passed the exploratory stage,” he said. “I think at some time in the near future we’ll add something like an in-plan guaranteed income benefit to our 401(k).”

For now, annuitization after retirement is the best option, Sarsynski said. Retirees should work with a professional financial advisor to determine how much of their savings to annuitize.

Education, education, education

Across the board, companies are vamping up their education efforts to help boomers, pre-retirees, and younger generations prepare for retirement.

MassMutual has been working with financial expert Farnoosh Torabi to educate the public via Facebook, seminars, and other means.

“She’s really appealing in a commonsensical way about how to save for retirement,” Sarsynski said.

Guido said ADP knows that people learn differently, so they offer several options for education; web-based tools, retirement savings calculators, print mailers, and in-person seminars.

“The key is making it as easy as possible to take the scary out of it with a lot of these auto features and then layer in different types of tools to help educate folks between the accumulation and the distribution phase of their career,” he said.

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Companies shift product focus to help struggling baby boomers

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