Case Study

Reluctance to Tap Nest Eggs

A good example of how Explore Qualitative™ Research works, and its synergy with Hearts & Wallets consumer quantitative, market sizing and advice benchmark research, is the years-long effort to decipher reluctance among older consumers to spend retirement nest egg capital.

More than a decade ago, older consumers started talking about working longer, and some were terrified by the idea of spending capital. The first indicators were insightful comments from individual consumers in Explore Envision about “God-forbid money.” 

Behaviors of older consumers without pensions in Investor Quantitative™ Database confirmed drawing down capital was going to be much less appealing than continuing to work, at least for consumers for whom health and opportunity make work possible. Applying this behavioral data to Portrait Market Sizing showed the market for “retirement income solutions”—hailed in 2007 as the greatest opportunity since sliced bread—was going to take 15+ years to reach critical mass, when enough people without pensions would be of retirement age, taking into account labor market receptivity to older workers.

This led to more structured dialogues about “chunk or nothing” behavior (1) in Explore Exercises and then finally actual products like “Drawdown Fund” in Explore Concept Tests, illuminated along the way by the Explore Segmentations called Retirement Spending Philosophy and Family Structure & Legacy Motive. Through these dialogues, we learned that consumer engagement would depend on different realities faced by parents and child-free individuals, and attitudes towards legacies. 

Meanwhile, the evolution of marketplace execution can be seen through Inside Advice® Benchmarking. Today, only the best advice experiences accommodate the emotional needs for one-time inflows or outflows that are behind "chunk or nothing" behavior. 

Taken together, the Hearts & Wallets databases provide a holistic perspective on how diverse groups of older consumers approach their retirement nest eggs and spending in retirement. Explore Qualitative™ Reports anticipate trends and bring facts come alive in the consumer’s voice.


(1) “Chunk or nothing” is the term coined by Hearts & Wallets to name the phenomenon of retirees either taking very little income or taking big chunks, instead of taking steady 4% as experts recommend. Structured products and services that work with this behavior are more likely to be successful than those that paddle against the current of consumer desire.

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