12mo ago

A boomer retirement bomb is about to blow up America's economy

www.businessinsider.com A boomer retirement bomb is about to blow up America's economy

Fewer than half of all boomers have saved enough for retirement. They'll be forced to rely on their millennial and Gen Z kids.

The great baby-boomer retirement wave is upon us. According to Census Bureau data, 44% of boomers are at retirement age and millions more are soon to join them. By 2030, the largest generation to enter retirement will all be older than 65.

The general assumption is that boomers will have a comfortable retirement. Coasting on their accumulated wealth from three decades as America's dominant economic force, boomers will sail off into their golden years to sip on margaritas on cruises and luxuriate in their well-appointed homes. After all, Federal Reserve data shows that while the 56 million Americans over 65 make up just 17% of the population, they hold more than half of America's wealth — $96.4 trillion.

But there's a flaw in the narrative of a sunny boomer retirement: A lot of older Americans are not set up for their later years. Yes, many members of the generation are loaded, but many more are not. Like every age cohort, there's significant wealth inequality among retirees — and it's gotten worse in the past decade. Despite holding more than half of the nation's wealth, many boomers don't have enough money to cover the costs of long-term care, and 43% of 55- to 64-year-olds had no retirement savings at all in 2022. That year, 30% of people over 65 were economically insecure, meaning they made less than $27,180 for a single person. And since younger boomers are less financially prepared for retirement than their older boomer siblings, the problem is bound to get worse.

As boomers continue to age out of the workforce, it's going to put strain on the healthcare system, government programs, and the economy. That means more young people are going to be financially responsible for their parents, more government spending will be allocated to older folks, and economic growth could slow.

212 comments

Why can't they just stop eating Avocado toast?
- Preach brother

Boomer mom inherited a house that was paid for, immediately did a reverse mortgage to fund her lifestyle.
Fuck you, mom.
- When people pass on generational wealth, I read its usually gone within 3 generations.
  Probably not true for billionaire level wealth, but for the people that work up millions or tens of millions.
  
  The worst part, the absolute worst part, is that it's a house my grandmother designed and my great grandmother financed.
  4 generations of my family have lived there, and it will be gone when mom kicks off.
  
  My wife's grandparents and their parents were very very wealthy but my mil and her siblings have literally waited every cent of it and im talking millions of dollars. One aunt is a forever student, she has never had a job, never earned her own money in any way and has constantly used money for her own education while never earning any degrees. One uncle spent the vast majority on gambling and alcohol.
  
  I think it's true at all levels. Dropping from billionaire to millionaire isn't as sympathetic though.
  
  That's usually because often the second generation grew up seeing and learning (and possibly expereincing) the work that initially generated that wealth.
  The 3rd generation only saw and experienced the lifestyle that comes with already having the wealth, and doesn't really have an innate understanding of what it took to generate it.
  
  The Chinese even have an idiom for this exact phenomenon, the saying goes, "富不过三代". Translated literally, it says wealth does not persist beyond three generations.
  
  Wouldn't it just be because it's divided among all their great grand children and spouses? If everyone had 4 children, the wealth would be divided 4^3=64 times. So, $1 million becomes $15k (assuming none is spent by the first 2 generations).
- My parents had a VERY nice house and decided to spend unwisely. They lost the house and all the equity in it, then bought a smaller house. They have since wasted every penny they have ever earned on random shit that they can acquire for their back yard. My parents could have put everyone through college or made a down payment on a house but decided instead to just spend and spend.
- Paying it forward
- Genuine question: why do you think you're entitled to the house?
  
  Because it was in the family for 2 generations before mom. My grandmother designed it, and my great grandmother financed it.
  It was their desire it stay in the family. Ideally, when mom died, it should have gone to my sister, if we're maintaining a matrilinear line.
  
  They have about as much of a claim on the house that their mother did anyway
  
  We've set up a society where your success in life is heavily dictated by generational wealth. It's not fair, but that's the game, so not passing on generational wealth while enjoying the generational wealth passed on to you is greedy.
  
  FYI, based on your follow-up comment, this wasn't a "genuine question" it was more of a self-serving opportunity to impart your beliefs and opinions onto someone else. It's a bad look, regardless of the shitty opinion you shared. Just thought you might want to know
  
  Genuine question: why do you think that the mother is more entitled to the house than OP? Neither of them paid for it.
  your comment exists only to be edgy/angry and project your own internal weirdness.

The real villains here are the absurdly rich. Especially those who find ways to pay less in taxes.
The top 1% are the problem.
Tax the rich.
- Even as people starve, they'll defend those absurdly rich folk because one day it'll be them starving people out!
  
  I hate this "I got mine"/"I'll get mine" attitude. If I were wealthy, I'd gladly pay higher taxes to support social programs. Shouldn't that be the whole point of accumulating wealth - to be able to give back? It should be hard-coded into the very structure of society.

No it isn't. That wave should have already hit. The 2010's called and they want their news item back. The real story is why aren't they retiring?
(Because they don't have a retirement)
- I think boomers that have high paying and powerful jobs are working longer than ever because they want to. The other side of the boomer wealth inequality, yes, those ones have to.
  
  In fact, every time I have seen a thread on the topic of boomers working past retirement because they can't afford to retire on Lemmy so far, someone chimes in about how they're in their late 60s and love their job as a [something rarely unpleasant], so they want to keep working.
  As if that's the same as someone in their 70s working the fryer at Burger King.
  
  I'm 46. When I was in high school we were told "pursue teaching or healthcare because everyone doing it now will be retired".
  I didn't pursue either thank god because
  They didn't retire
  When they did or openings came up they were replaced by low wage immigrants that were willing to get paid less to do the same job with a worse title.
- I think the point is that we are coming up on the moment when those retirees who didn't retire in the 2010's, because they had no money to retire with and can't live on the joke salary of what social security has become, are all about to be forced by nature and an employment structure that's is hungry for younger talent to actually retire. And we have no infrastructure to handle that.

I was told this could be all fixed by pulling up your bootstraps and a firm handshake.
- Also no more starbucks and avocado toast. Easy.
  
  Boomers drink used motor oil and eat asbestos toast. It's called moxie, kid.

Look, there was a generation between Boomers and Gen X and the fact that they're now just lumped in together is ridiculous. They're called Boomers because they were born during the baby boom immediately following WWII. That boom did not last 20 years. Actual Boomers have been retired for a decade.
- Gen X, always forgotten. Fuckin latchkey kids to the end.
  
  I think a lot of us grew to prefer it that way.
- Someone born in 1950 was only 64 10 years ago. There are plenty of older boomers that have been waiting to retire into their 70s.
  Elevated birth rates lasted at the very least until the late 1950s. It was more than just a few years.
  
  There are plenty of older boomers that have been waiting to retire into their 70s.
  So what? They should've been retired for a decade. Sticking around in the workforce is tantamount to theft of wealth and opportunity from the generation coming up behind them.
  The "late 1950s" boomers are literally the only ones who have any excuse to not be retired yet.
- The last boomers haven't. The youngest ones will be 60 this year. There are still tons of them in the workforce.
  
  No, that's what I'm saying. Those turning 60 this year are not Boomers. They are the generation that came between Boomers and GenX. Yeah, even this Wikipedia article lumps them in with Boomers, but they weren't considered Boomers as they were coming of age: https://en.wikipedia.org/wiki/Generation_Jones They shouldn't be now, either. Ask any of them if they consider themselves Boomers.
- While generally right here.
  they have not been retired for nearly a decade. THEY SHOULD HAVE BEEN. but they've been holding on. How many companies have fossils still leading them?
  as someone in my 40's, just before millenials. We were lost because there's simply no way up the ladder to places the boomers refused to vacate. doesn't matter how educated, experienced many of us were, There was a ceiling. We were told "hold your turn. boomers will retire soon"... they're in their 70's and 80's now. My parents included (Thankfully with us). But they're all STILL TRYING TO WORK!
  My parents at least DID retire Mostly. MY dad still does some work because to the boomers, work was living. they really knew nothing else.
  problem is now the combination of Covid and age, and many of them legit dying while still working, we've got a clusterfuck of an economic problem (here in Canada, we're already experiencing this wave). Immigration, Local resources, and infrastructure is just simply not setup for the mass wave of retirees going straight into either homes, or the ground. We can't import people fast enough to fill all the jobs, and the faster we import them, we can't build homes fast enough to keep the housing in check.
  have to get ahead of this 10 years ago sadly. We're too late and we'll all be playing reactionary for the next 20 years in regards to the shifting demographcs.
- The boomers started retiring 20 years ago. What they're doing now is dying.

"Can I live with you?" I remember my Dad joking. I said, "Maybe you should have thought of that when you kicked me out when I finished high school."

Maybe boomers will finally stop blocking the healthcare reforms that they will desperately need. If they can turn off TV news long enough to see their own problems instead of the made-up problems they are trained to focus on.
- I think that, more likely, they'll plump up healthcare services for only themselves. Boomers don't vote against big government social services for everyone, they only oppose it when it's not for themselves. That's why both Republicans and Democrats defend Social Security and medicare for the elderly. Even DeSantis is campaigning on defending SS.
  
  Unfortunately, I'm sure you're right. I'm not sure how the younger generations will afford to foot the already astronomical bill for Boomer healthcare. Meanwhile, actual healthcare reforms would benefit everyone and in fact end up costing far less.
- Hit the Pause Button on Medicare for a couple of years. Literally pay nothing. And a lot of our old people problem will disappear.
  
  The whole point is that it's not really an old person problem. It's a poor person problem.
  We rag on the boomer generation for sponging up all the wealth for themselves, but what gets lost is that this was also at the expense of large swathes of less fortunate boomers. They weren't just hoarding from other generations, they were hoarding from their fellow boomers. The exploitation class did not discriminate by age.

My father has Parkinson’s and my mother, who was his primary caregiver, passed a few months ago. They went from being comfortable with their finances and having a small, but nice home, to my father now going into a nursing home and likely lose everything he owns because of how expensive nursing care is. We are looking at $7k a month with zero assistance from Medicare and he has enough money that he doesn’t qualify for Medicaid but will burn through all his assets in just a short time. It’s ridiculous that people work hard and save and it’s all gone in a flash.
- Let the debt die with him. Get that house into a trust, or out of his name however you can. Don't let greedy corporations steal the generational wealth he worked hard for and surely wants to pass on, and not have taken away by the health care industry. A few grand on lawyers and accountants now will save you hundreds of thousands down the line.
- Your father needs to put his assets into a trust ASAP then. Once he divests through the trust he will qualify for Medicaid. It's unfortunate that we need to jump through these hoops, but it is what it is.
  
  I've seen it go both ways. Things are so much better for the kids when assets are in a trust. Without it, I've seen people lose everything. Don't give the dirty debt collectors a dime.
- Sorry to hear about that. This is one reason why I wonder if it's even worth saving for the future. Live the best life you can in your prime years and then let the pieces fall where they may in the end. You'll qualify for more programs if you didn't bother saving anyway.
  
  Assuming those programs still exist by the time you get to that point.
  If the oligarchs continue to get their way, those programs will disappear. It doesn't serve them to have a class of people whose labor or income they can't exploit.
  
  If you want to pass on generational wealth you need a trust. It keeps those assets protected, and once you die the debt dies with you.
  
  If you’re 40 or under it isn't worth saving. Retirement is a Myth for Millennials onward. Unless we get UBI, everything is going to go tits up anyway.
- Because the system isn't designed to work for even the upper middle class, or even the comfortably independently wealthy. The system is designed to continue diverting all of that hard work's rewards towards the wealthiest tier of wealthy.
  Nobody is safe from this vampirism, not even those who would call themselves rich. As it is, wealth will always siphon down to the parasites at the bottom. We've all been fooled into thinking we're at the bottom of a pyramid (or, if you're lucky, somewhere in the middle), but it's really just a funnel, sucking everything down to a single point.

So the top two hundred net worth individuals have amassed 30% of us wealth and boomers hold half the wealth. No wonder young people are suffering...
- I think the point is that those two hundred are Boomers. The rest of the boomers are broke.
  
  Yeah it's easy to get mad at boomers. It's also easy to forget that medicare and social security are under attack. The divisionthat matters isn't between generations, it's between the rich and the poor.
  
  It's always a class war, anything else is a distraction.

economic growth slowing? sounds like an ok situation to me.
Growth is literally destroying the habitable planet, the mindset of growth needs to stop.
- Growth slowing is fine when your economic system doesn't require infinite growth. If we're looking for shrinkage we need to change economic systems... Which I'm personally all for

Those lazy boomers just don't wanna work any more, my generation (millenial) has at least two jobs and shares a apt with 6 other people. Or why don't they just learn to code?

After all, Federal Reserve data shows that while the 56 million Americans over 65 make up just 17% of the population, they hold more than half of America’s wealth — $96.4 trillion.
How is that wealth distributed? What do you wanna bet it's REALLY skewed towards rich people hoarding like old dragons? What's the median, not average, wealth of the boomers?
- You didn’t read the article…this is covered in a table.
  
  I see income distribution. Is there wealth distribution? I don’t see it. They’re not the same. they can be pretty disconnected.
  
  Oh, I stopped before then, thanks for mentioning it!

Tax the wealthy more, they won't lose any quality of life whatsoever, and the money they extorted from their fellow humans gets paid back to support them in their old age.
This isn't actually a hard problem to solve if you take greed out of the equation.
- It's still going to be a hard problem to solve, even though we should raise taxes on the elites.
  When there are more old people in retirement than young people at work, it's impossible for each old person to get the care they need. This pulls more workers out of other economic functions to help take care of these people which just further exacerbates the supply shortage.
  Furthermore, most of our economy is built off ""innovation"", which is typically done by people in their 20s-30s. This generation is going to be limited by this extra work of being care caretakers, and the costs of innovation are going to be higher....
  Consider all this, then add Taiwan just voted for independence, so China is likely to be more antagonist towards the west, so costs of simple manufacturing or complex manufacturing of consumer goods are also going to skyrocket
  The next 7 years are going to be very interesting
  
  Taiwan didn't just vote for Independence, they elected the China-skeptical candidate for President. It wasn't some Brexit-esque national referendum on Independence.
  
  I don't think it's correct to assume that the labour market will move into old age care just because more workers will be needed. Personally, there's no amount of money that you could offer me to get me into that line of work.
  As I understand it, there's already a shortage of workers in that field. Increasing demand might draw more as the money (theoretically) increases, but being short staffed adds even more difficulty to the work, so burnout might be high enough to counteract that.
  In short, I think a lot of boomers will suffer as they need care, and it's possible it'll also affect younger generations.
- You underestimate the stupidity of boomers, they'd rather vote to increase SS taxes for the younger generation than to realize they've been Stockholm syndromed their entire life.

In my country, 2030 is foreseen as the year the public retirement plan administration system will collapse due to this.
Dismantling public healthcare is a solution our government is already going for to the detriment of everyone (unfortunately) but public retirement plans cannot be changed retroactively to any extent, they are reducing the highest pensions and blocking the rest of them (inflation will de facto lower even the blocked ones) while at the same time increasing the retirement age progressively but still it isn't enough.
We're doomed, no matter how much blood and tears.
- What country is that?
  
  I'm ashamed to tell because people will start yelling... but it's in my bio.
  
  Could be Canada from their description.

My dad would have been a boomer. Guy did have the advantage of entering the workforce during a time when it was still not only possible but even normal to expect to hold the same job for decades, but that and a kid who cared about him were about all he ever had to his name. And then he lost the job too.
He fought hard as shit, but with zero legs up and several of them permanently down, he never managed anything resembling the life he (or anyone else) hoped for, and after he died, the palliative nurse told his remaining family he was better off.
Being born in a lucky generation makes it easier, but it doesn't guarantee one has it easy. It's not an age group, it's a behavior. Not that we aren't already in the Find Out stage, for that to matter. But the fewer people under the impression all the bad people are going to die out, the better.
- Ironically I think lots of people who condem the entire Boomer generation as a whole would also understand the term White Privilege and understand that it doesn’t guarantee a better life for everyone in that group.
  Perhaps if people saw this as more of a “Boomer Privilege” in that this generation had better odds, but not a guarantee that they would be financially secure.
  
  I don't blame Boomers for their luck / privilege. I blame them for voting for Republican assholes that constantly pull the ladder up behind them.
  They are the fuck you I got mine generation. All of them? Of course not, but it makes no fucking difference because enough of them have given us Reagan, Bush, Bush, Trump.
  Each one a bigger asshole than the guy before each one with less compassion than the guy before. In short assholes all around.

Cancer and death wiped out my parents' shit. And apparently several financial crises are all it takes for a small business owner to give up their decades-old life insurance policy to afford food and utilities.
- Isn't it crazy to think that if they had moved to any other modern country, they wouldn't have lost a dime from cancer.
  
  Fuck when you put it that way.

Oh no. Kinda seems like we should be funneling money into welfare, huh. Maybe something livable so those that can't find or maintain employment aren't digging in the trash? Bad times for anyone who expected perpetual growth.

So a couple narratives, right. One is that they're just gonna blow all their generational wealth on nothing and blah blah blah fuck off, and then those that do have generational wealth are just gonna get it eaten up by government inheritance taxes, and maybe debt collectors, who are less sympathetic, because fuck debt and specifically people looking to wring old people for all their worth. Scum, lowest of the low, should be lined up and pelted with. Maybe small coins? Pocket change? Could be kind of ironic.
At the same time, little weird that people will make a big stink about medicare and social security going underwater, and then not want to pay taxes on inheritance, because they're entitled to it. That shit doesn't track, really. They could advocate for less spending on the military, sure, but if the conception of the economy is that it just kind of works like how a house balances debt (it doesn't), then paying debts should be good, no? Weird double standard in western culture, still. Everyone hates usury, but simultaneously conceives of "the economy" as working through it, and "the economy" as being, if not good, then incredibly important and worth protecting at all costs. Point is, the common conception of how the economy works is flawed, and then some people have an idea of how it should work, but, in any case, the ire should be drawn with that, rather than with "the boomers". Attacking "the boomers" is weird. It's treating a symptom, not the cause.
Second, also a weird note, is that "the boomers", monolithically, are holding onto their jobs, or something. Certainly, a good proportion, and probably the majority that are still holding out, are doing so because of a lack of alternative, and despite how good it may feel, it's probably not moral to blame someone for, say, being an alcoholic in their 20's and 30's, and say they don't deserve to retire on that basis. Kind of scummy. A good amount of boomers face that situation, and face worse situations where they aren't even at fault for their positions, really. Any racial minority, really, including some we now consider to be white.
Then, a small proportion are refusing to retire because they're just at the top of the company. Board executives, big decision making guys. Unfortunately for the rest of us, we will never get their positions. If they retire, will their job be taken by some millenial? Will it be taken by someone in Gen X? Would it even matter, or would the position inherently be both corrupting, and magnetic to the corruptible and corrupt? Probably the latter, probably it wouldn't matter who it went to, because it's just part of a larger power structure and whoever gets hired is going to be in further service to said power structure, as it's self-reinforcing.
Also, this shit is never true. ohhhhh no social security is going away because the boomers are retiring! nooo! you should be able to invest your retirement into a private account on the basis that the government's social security and retirement plans are going belly up because of all the boomers! nooo! this shit has been spinning for like 40 years, do not believe the hype.

Maybe they'll fuck themselves over for a change.
- lol. lmao, even. they're not done with you yet.
  be ready for filial support laws (already on the books in many states) to be enforced with gusto. when the boomers run themselves out of money for real, they'll be weilding the law as a weapon to pull their care expenses and lifestyle needs right from the paychecks of their children, like child support.
- Seriously, fuck them. The whole generation has fucked the world over so much, let's all let them rot.
  
  Hey you had the chance to let the boomer remover do its thing but some asshat decided we needed vaccines.

You cannot get me to empathize with boomer retirement woes, when they built their gilded sky-fort by looting the peace dividend after WW2 and told everyone else to fuck off and make it their own way. Every single generation since has been poorer, had less wealth and ability to save for retirement, all while the boomers vote themselves more and more entitlements.
The trickled fire sale from retirement funds and portfolios is going to be brutal. Every market transaction needs a counterparty, and if everyone else is too broke to buy stock/bonds/houses at the price your financial ‘planner’ values it, the bubble pops.
- *empathize

This is a lesson on making your assumptions on averages.
There's only one average despite wraith inequality, the boomers will end up working several small jobs and not fully returing for some time.
They're the healthiest generation to hit retirement yet.

I feel nothing for the boomers who aren't ready.
- If there is any sort of ask to "feel for" someone, it's probably the retiree's children.
  
  Yep. That's where all my sympathy goes. Everyone that has to live in the fucking world these boomers created.

This sounds like opportunity all around to me. All 30 and 20 something's will get some scraps in the process of recycling everything boomer.

Just import a couple percent of your population a year from India to work shit jobs and pay taxes while threatening the existing cultures like a fuckwit frenchman up in canada did.

Eh, it'll create job openings

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