A new lexicon

of financial behaviour

In 2006, Dr Greg Salsbury, Executive Vice President of Jackson, our US business, predicted that a number of forces were creating a ‘perfect storm’ for a generation of under-saved and over-spent US ‘baby boomers’.

10 

The United States is the largest retirement market in the world, and growing. As 10,000 ‘baby boomers’ retire daily for the next 20 years, with US$7.6 trillion of assets11, they will continue to drive demand for smart retirement income solutions. Greg Salsbury has developed a new approach to explain retirement planning, which he describes in his book Retirementology, published in 2010.

For some people retirement comes sooner than expected and, in certain circumstances, this can cause concern rather than comfort. Greg argues that retirement planning is an ongoing process that encompasses a wide range of financial decisions, which are often shaped by emotions and biases.

Retirementology unmasks life-long financial patterns and examines how, if left unchecked, these behaviours could harm prospects for retirement.

$7.6

trn 

of assests held by
'baby boomers'
in the US

Through hypothetical scenarios, and real-life feedback from focus groups, Retirementology shows how the choices people make today can affect their retirement later. Greg says: “The financial crisis has caused some people to do irrational things with their money – making emotional decisions that may be detrimental to their retirement plans. Letting emotion dictate our financial decisions can lead to a dangerous cycle of overspending and rising debt.”

Retirement planning is an ongoing process that encompasses a wide range of financial decisions, which are often shaped by emotions and biases.

To help capture people’s imagination, Retirementology introduces a new way of talking, and thinking, about retirement planning, with a vocabulary that includes memorable terms for key issues that influence behaviour. These include ‘equimortis’ (the dangerous condition of relying on home equity to fund retirement), ‘bingefy’ (justifying a big-ticket purchase because you were previously frugal) and ‘kinphobia’ (fear of having to tap into retirement savings to support the extended family).

“I created the new lexicon to help readers relate to the concepts in the book on a personal level,” says Greg. “People may not remember the precise psychology behind these behaviours, but they will certainly remember ‘bingefy’ and hopefully take steps to avoid it.”

Jackson’s advisers are using Retirementology materials to help remove the fear, and restore customer confidence, about retirement planning.

Retirementology shows how the choices people make today can affect their retirement later.”

DEFINITIONS

Equimortis
The dangerous condition of relying on home equity to fund retirement

Bingefy
Justifying a big-ticket purchase because you were previously frugal

Kinphobia
Fear of having to tap into retirement savings to support the extended family

Further reading
For more information on Retirementology visit
www.retirementology.org

10 US Census Bureau – those born since 1945

11 Tiburon Strategic Advisers, LLC

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