Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Boomer retirement will be a non event, because the majority simply cannot retire. Forty-one percent of workers ages 45 to 54 have less than $25,000 saved up for retirement. Many others refinanced their mortgages late in life and will not be mortgage free until their 70's or 80's. Most will opt to work longer to attempt to maximize Social Security benefits, but due to poor diet, alcohol, and obesity many will die before ever collecting a single check. The ones who do will put off by new laws that will ratchet up the age at which you can collect.
It is not boomer retirement that is the problem; it is boomer reduction in spending. As we age we spend less on consumer goods, especially high impact discretionary goods.
The Consumer Expenditure Survey is a good tool to look at this, while it is not perfect it does show a trend.
The peak ages for spending are 35-48.
The 35-44 cohort spends on average of $58,800 a year, 45-54 $61,179, 55-64 $54,700, 65-74 41,433.
The peak is about 48/49 so that cohort does not show the whole picture. The drop off from the peak cohort to the next is over 10%, the drop off from the peak to the 65-74 cohort is over 32%, this is huge considering the largest demographic is entering the two drop off cohorts and a smaller generation is replacing them.
Like you say the boomers won’t be retiring (voluntarily) but that does not mean their money is going to buy more stuff, it will be saved and used to pay off debt.
That si not what i see. Some boomers may not be able to retire and other do not awnt to actaully. But the nmbers retiring early have never been near what they are now.Many see their pension not gaining much or they are fofered a retirement package that makes it worth while to go.My wife retired 11/2 years early because basically the gian projected did not make it worth her waiting in her retirement. Certainly their are bommers who plans it cahnged but those who planned and cutback on risk are not effected as much as those who plan on saty to 70 or older.Ceertainly as you say their spensding will change alot in the economy but it unlike we will knwo until this period of uncertainty is over because they like others are hunkered down.When looking at debt and who has moeny the boomers will have mroe effect than once was thought on sepnding as others fight to pay debt;save at rates not seen in deacdes. its said that workers savings arte are expacted to reach the rates of 1980 which was just what happened with most boomers after the 70's recession.I am much more worried about waht is going to happen to those in their 40-late 50's than anyhting else. They were likely to have bought homes at the peak and hav emore risk i there market accoutns in ;large amouints than those older or youmger.There is alwasy the exception to each generation.
It is not boomer retirement that is the problem; it is boomer reduction in spending. As we age we spend less on consumer goods, especially high impact discretionary goods.
The Consumer Expenditure Survey is a good tool to look at this, while it is not perfect it does show a trend.
The peak ages for spending are 35-48.
The 35-44 cohort spends on average of $58,800 a year, 45-54 $61,179, 55-64 $54,700, 65-74 41,433.
The peak is about 48/49 so that cohort does not show the whole picture. The drop off from the peak cohort to the next is over 10%, the drop off from the peak to the 65-74 cohort is over 32%, this is huge considering the largest demographic is entering the two drop off cohorts and a smaller generation is replacing them.
Like you say the boomers won’t be retiring (voluntarily) but that does not mean their money is going to buy more stuff, it will be saved and used to pay off debt.
It will be interesting to see what changes we will see in Medicare as that will more than likely have a huge impact. As people age they spend less on retail items and more on health care and drugs. My guess is that we will see higher deductibles on healthcare shifting much more of the financial burden to seniors. It is hard to spend on consumables when you need to spend the money on doctors and drugs.
It will be interesting to see what changes we will see in Medicare as that will more than likely have a huge impact. As people age they spend less on retail items and more on health care and drugs. My guess is that we will see higher deductibles on healthcare shifting much more of the financial burden to seniors. It is hard to spend on consumables when you need to spend the money on doctors and drugs.
Good point, just the pure numbers of boomers will cause their own costs to rise along with younger generations having to pay for their own care plus the care of the massive boomer generation.
Can't negative, depressing news stimulate the economy?
I was greatly surprised, after 9/11, that consumption didn't take off like a rocket. Reason being? Something on the line of: Holy Cow! The world is coming to an end quicker than I thought! Not gonna wait one more minute to see the Great Wall of China!
Around the world I go with my credit cards, screw it!
And the oil spill, Iran with potential nukes, Global Warming, North Korea, the fear of our government defaulting on our soveign debt, the fear of losing your job, the fear of the recession growing into a Great Depression, etc. etc.
How many out there, many of them extremely intelligent, saying: Let's go for broke! Just keep enough in the bank for a .38 Smith & Wesson and one bullet!
Last edited by tijlover; 07-13-2010 at 10:53 PM..
Reason: Add word
Can't negative, depressing news stimulate the economy?
I was greatly surprised, after 9/11, that consumption didn't take off like a rocket. Reason being? Something on the line of: Holy Cow! The world is coming to an end quicker than I thought! Not gonna wait one more minute to see the Great Wall of China!
Around the world I go with my credit cards, screw it!
And the oil spill, Iran with potential nukes, Global Warming, North Korea, the fear of our government defaulting on our soveign debt, the fear of losing your job, the fear of the recession growing into a Great Depression, etc. etc.
How many out there, many of them extremely intelligent, saying: Let's go for broke! Just keep enough in the bank for a .38 Smith & Wesson and one bullet!
It can but it needs to be during the right time of a cycle. Spending did pick up after 911 because the boomers were still squarely in their peak family spending years, plus the internet had just reached 50% market saturation and had a ways to do.
A comment on restaurant meals. Last night my wife and I went to a nearly deserted local restaurant for a light supper. I had a large Greek salad and she had a bowl of chicken soup. I had a diet soda and she a cup of very bitter decaf coffee. I expected to pay around $15 to $18 for the meal. The bill came to over $25 and with a tip the meal cost $30.
At $30 for a light supper no wonder the place was empty. My wife and I are considered senior citizens. I am employed full time and she part time. We can afford $30 for supper but I am annoyed at what we consider an unreasonable price. If the alternative is a fast food place we will stay at home.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Your City Office
