the Baby Boom
Generation evolution continues....
Baby boomers retirement seems to be arriving with several complications of a weakened economy. The large numbers of baby boomers leaving the workforce each year for the next 19 years will impact the economy for everyone. Likewise, the reversals in the economy and the stock market have diminished the retirement financial resources for many of this generation. Even some baby boomers who created IRA's and 401K's and other investment portfolios as part of careful planning for income during the retirement years are now aware that they have far less money to fall back on than what they planned.
When the stock market plunged to lows that were uncomfortably reminiscent of the great crash in 1929, it took large chunks out of retirement funds both in the personal savings area and in many pension plans. Losses of half or even more of retirement savings are not unusual.
A wave of changes in spending patterns may be expected with the baby boomers retirement. While this largest American generation currently accounts for more than half of all consumer spending and discretionary spending, some of them through no fault of their own face retirement far less financially secure than they had anticipated during their working careers. Because there are so many baby boomers, reduction in their income and spending will very noticeably impact the economy.
Of course, this is not the case for all baby boomers. Many in executive positions receive so called “golden parachutes” when leaving their jobs either at retirement age or even earlier. Lump sum payments and other benefits which may run into the millions of dollars mean that their retirement will come with financial security and no dependence on the modest stipends of the Social Security system. Still other boomers fall into a middle ground with incomes that may be reduced from the working years but yet still adequate for a comfortable standard of living.
Another issue that baby boomers who are at the point of retirement must consider is the constantly rising cost of health care at the time of life when a person is more likely with each passing year to need more frequent and more expensive health services. The very high numbers of boomers retiring for years to come is sure to strain financial resources for medical care while also challenging delivery systems which may not have the proper staffing of physicians able to adequately care for a geriatric population.
It is bittersweet that improvements in the medical care of the aging have extended life and the quality of that life because many may have great difficulty affording that level of care. It is doubtful that the government, which is struggling with deficit and debt in the face of great resistance to increased taxes, will be able to fully meet the health care needs of these newly senior citizens.