Baby Boomer

The 2030 Problem: Caring for
Aging Baby Boomers

"Baby boomer" is a term used to describe a person who
was born between 1946 and 1964.
1 The baby boomer generation makes up a substantial

portion of the world's population, especially in
developed nations.
2 According to the latest census report, it represents 73

million of the population in the United States, as of
July 2019.
3 As the largest generational group in U.S. history (until

the millennial generation slightly surpassed them),
baby boomers have had—and continue to have—a
significant impact on the economy.
4 As a result, they are often the focus of marketing

campaigns and business plans.
Understanding a Baby Boomer
Baby boomers emerged after the end of World War

II when birth rates across the world spiked. The
explosion of new infants became known as the baby
boom. During the boom, 76 million babies were
born in the United States alone
Most historians say the baby boomer phenomenon
most likely involved a combination of factors:
people wanting to start the families that they put
off during World War II and the Great Depression,
and a sense of confidence that the coming era
would be safe and prosperous. Indeed, the late
1940s and 1950s generally saw increases in wages,
thriving businesses, and an increase in the variety
and quantity of products for consumers.
Accompanying this new economic prosperity was a

migration of young families from the cities to the
suburbs. The G.I. Bill allowed returning military
personnel to buy affordable homes in tracts around
the edges of cities.
This led to a suburban ethos of the ideal family

comprised of the husband as the provider, the wife
as a stay-at-home housekeeper, plus their children.
By 2034, it is projected that older adults will
outnumber those under age 18 for the first time in
U.S. history. In a 2021 article by the Brookings
Institution, Baby boomers spent about $8.7 trillion
in 2020 on goods and services. This is expected to
increase to $15 trillion by 2030.
And even though they are aging (the very youngest

boomers are in their late 50s as of 2021) they
continue to hold corporate and economic power;
in the U.S., 50.3% of personal net worth belongs to
boomers
Baby Boomers and Retirement: Why the Boomers'
Retirement Is Different
The first of the baby boom generation became eligible

to retire in 2011.
In many ways, the way they spend their post-work

years will be different from that of their parents;
members of what's often called the Greatest
Generation.
Much Longer Retirement
Many people in previous generations worked as long

as they could and few were fortunate enough to have
a retirement that would be considered golden by
today's standards.
America's post-World War II prosperity made things

better for the greatest generation, who benefited
from a workforce in which there were over 16
employees for every retiree.
Plenty of people in that generation were able to retire

at the official age of 65.
One change between then and now is that a large

percentage of the 73 million American baby boomers
are expected to live longer than their parents did. So
their retirement period will be longer
Higher Expectations
With more health and energy—and their children now

adults—boomers who can afford it expect to spend at
least early retirement fulfilling travel dreams and
other bucket-list items. Those who reach retirement
age now are often healthy enough to run marathons,
build houses, and even start businesses.
Instead of relocating to retirement communities,

many are migrating to small towns that can offer
employment and education opportunities.
Other boomers are choosing to move into urban areas

to take advantage of amenities, such as public
transportation and cultural attractions.
More Investment Choices, Less Investment Safety
The greatest generation had relatively few

investment options: mostly ordinary bonds
and certificates of deposit. But those are relatively
secure forms of income.
That's not true for the boomers. What's more, with a

longer lifespan comes more opportunity, and need,
to take at least some investment risks to ensure
keeping up with inflation.
Today's boomers are faced with an ever-expanding

universe of income securities. The investment
industry has provided a lot of rope to invest, and a
lot of new and exciting ways to lose it all.
Rising, Instead of Declining, Interest Rates
In the 1980s, when the greatest generation started to

retire, interest rates exceeded 19%. This was good for
savers (and terrible for homebuyers). Ever since,
interest rates have been decreasing, with some
periods of increases.
For example, during the COVID-19, interest rates

dropped to a target of 0% to 0.25% in March 2020 but
rose two years later to target of 0.75% to 1% as of May
2022. The long decline in interest rates provided a
great return to bond investors.
target
The boomers are facing the very opposite situation.

Instead of an ever-declining interest rate, they are
facing the likelihood of steadily increasing interest
rates during their retirement.
Personal Savings Instead of Pensions
The greatest generation might have had a lower per

capita income, but many of its members also had
corporate or union pensions, which could be a
considerable amount after working for a lifetime for
the same employer, as was once common.
But the economy changed, many large corporations

merged or disappeared, and unions dropped from
20.1% of workers in 1983 to 10.3% in 2019, according
to the U.S. Bureau of Labor Statist
The IRS allows for increased contributions to
retirement accounts for those age 50 and older,
known as "catch-up contributions.
As for the federal pension known as Social Security,

there is concern that it could fall short. The problem
is that the baby boomer generation is much larger
than previous generations; Generation X, which
follows it, is much smaller; and even the larger-than-
the-boomers millennial generation isn't large enough
to offset the increased longevity of boomers
A Retirement Fund Shortage?
In addition to many not saving enough money,

boomers experienced the Great Recession at a
crucial time for their retirement savings. Many
boomers jumped into expensive
investments, mortgages, and startups in the
late 1990s, only to find themselves struggling
to make those payments a few years later;
many found themselves completely tapped out
or their mortgages underwater.
For those with such debts, savings have been

put on the back burner. What's more, boomers
who responded to the Great Recession by
turning ultra-conservative with the savings
they had left got a second hit: By not holding
enough of their portfolios in stocks, they’ve
missed the huge bull market that followed and
risked letting their nest eggs stagnate.
Meanwhile, wages have not increased

significantly for many parts of the population

How Boomers Can Prep for Retirement
Taking some of these steps could help baby boomers

manage retirement.
Don't Retire (At Least Not Too Soon)
One idea might be the most non-traditional of all:

don't retire. Or at least, delay doing so beyond the
proverbial age 65, 66, or 67 (depending on birth
date). Whether that means working longer,
consulting, or finding a part-time gig, being part of
the workforce can help boomers financially and
emotionally.
Plan for Health Issues
Boomers, who came of age during the freewheeling

1960s and 1970s, often project an image that they
will stay active forever; and indeed, many are in
better shape than their forebears at the same age.
Still, the human body isn't invulnerable.
Obesity, diabetes, hypertension, and high

cholesterol are inevitably all on the rise in the
boomer population.
Cancer and heart disease are the leading cause of
death. And then there's dementia: according to the
Institute for Dementia Research & Prevention, it is
estimated that 1 in 6 women and 1 in 10 men who live
past the age of 55 will develop dementia in their
lifetime.
Make a Will
As of May 2020, 45% of adult Americans have a

living will, which details their medical wishes, such
as whether to be put on life support should they
become unable to articulate their wishes.
About 26% of boomers over 65 have not drawn up

wills that stipulate how their assets should be
distributed in the event of their own deaths, leaving
the door open for a host of potential legal and
financial problems.
The eldest boomers are still in their early 70s. That's

the time to make decisions about healthcare and
also about who should be in charge of their life and
finances, should they be unable to make responsible
decisions due to illness or incapacity.
Boomers shouldn't leave those decisions to others;

they should make them themselves.

Baby Boomer

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The 2030 Problem: Caring for

Aging Baby Boomers

1 The baby boomer generation makes up a substantial

2 According to the latest census report, it represents 73

3 As the largest generational group in U.S. history (until

4 As a result, they are often the focus of marketing

Baby boomers emerged after the end of World War

Accompanying this new economic prosperity was a

This led to a suburban ethos of the ideal family

And even though they are aging (the very youngest

The first of the baby boom generation became eligible

In many ways, the way they spend their post-work

Many people in previous generations worked as long

America's post-World War II prosperity made things

Plenty of people in that generation were able to retire

One change between then and now is that a large

With more health and energy—and their children now

Instead of relocating to retirement communities,

Other boomers are choosing to move into urban areas

The greatest generation had relatively few

That's not true for the boomers. What's more, with a

Today's boomers are faced with an ever-expanding

In the 1980s, when the greatest generation started to

For example, during the COVID-19, interest rates

The boomers are facing the very opposite situation.

The greatest generation might have had a lower per

But the economy changed, many large corporations

As for the federal pension known as Social Security,

In addition to many not saving enough money,

For those with such debts, savings have been

Meanwhile, wages have not increased

Taking some of these steps could help baby boomers

Don't Retire (At Least Not Too Soon)

One idea might be the most non-traditional of all:

Boomers, who came of age during the freewheeling

Obesity, diabetes, hypertension, and high

As of May 2020, 45% of adult Americans have a

About 26% of boomers over 65 have not drawn up

The eldest boomers are still in their early 70s. That's

Boomers shouldn't leave those decisions to others;

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