the Baby Boom
Generation evolution continues....
Retirement and baby boomers means many questions about the impact of so large a group leaving the workforce at the same time. Issues that confront baby boomers are disappointing returns from pension and other investment programs and questions about the long term viability of Social Security. A smaller and less prosperous younger workforce may not be able to sustain the system. The time has come for retirement and baby boomers to be terms that go hand in hand. What was the largest generation born in the United States and of the rest of the world between 1946 and 1964 will be turning 65 starting on January 1, 2011. For the 19 years that follow, they will turn 65 years old at the staggering rate of some 10,000 every day.
While baby boomers were once known by only a couple of labels, a new one is emerging. At first the group born in the first half of the post war baby boom were just called “baby boomers.” Eventually, some writers and sociologist began to refer to those born in the second half as the Jones Generation of baby boomers, after the writer Landon Jones who coined the name of baby boomer itself. Now, as baby boomers reach that magic age of 65, they are beginning to be called the “golden boomers.” Part of this is an obvious reference to the golden age of life, but a more subtle meaning is a hint at how much of the “gold” is now in the hands of boomers.
The baby boom generation of over 77 million souls is the largest in American history. This massive workforce produced income that truly drove the economy itself, accounting for more than half of discretionary spending and overall consumer spending annually. With boomers moving into retirement themselves, this will affect everything from spending power to tax revenues collected.
The traditional safety net for American retirees of Social Security is paid ahead by those currently working to fund payments to those who have already retired. With the boomer generation being both huge and successful, this has worked well, but as they retire the generations that have followed are far smaller. For example, the cohort of Generation X born in the time after 1965 number only 51 million. Also, payroll tax revenues are decreased both from underemployment and unemployment as well as from tax cuts ordered to try to stimulate a faltering economy.
As well as questions about the viability of Social Security, many other means of financing retirement for baby boomers have had setbacks. Interest rates on saving accounts and CD's have been low, and funds dependent on the stock market have sustained great losses in the recent years. This may foretell a baby boomer generation retirement with reduced income and less purchasing power to sustain the economy.