Not So Booming For All Boomers

boomer buttonIn 2005, things were going swimmingly for many of the 77 Million Baby Boomers. Back in 2005 the front end of the Boomers (born 1946 to 1964) were moving into their early 60s and younger Boomers were still in their early 40s. The economy was stronger than it is now. We had not yet had the Great Recession and portfolios were stable after the dotcom hiccup earlier in the decade.

Boomers operated from a reasonable (at the time) set of assumptions, now proven not to be so reasonable—proof of the importance of worst case planning. The prevailing assumptions were:

1. Many Boomers would continue to have high paying jobs befitting their experience for the next decade

2. Their residences would appreciate in value, and even though they were heavily mortgaged, this was not really a concern.

3. Their portfolio values would continue to rise, increasing their net worth annually.

The so-called fecal matter hit the fan in 2008 and most everything Boomers assumed to be fact. proved not to be the case–jobs were lost (and many never regained), portfolio values were whacked, and those who were heavily mortgaged found themselves “under water” and those with balloon mortgages found themselves with no ability to sell and/or borrow.

Fast forward to 2013 and those same Boomers are now older (youngest ones are turning 50 & the Boomer elders are now 65+), many are less financially stable, need to continue to work but are finding jobs harder to come by. With the wisdom of hindsight many are far wiser, but with little time to help them recoup. The realities that they have faced are as follows:

1. Jobs are not plentiful. The economy may be improving, but many Boomer workers are suffering. Those who have good jobs are holding on to them dearly (Boomer Blockade). For those who lost their jobs, two-thirds in that age group who found work again are making less than they did in their previous job. The average salary is now almost 20% less than previous. And finding that lower paying job takes a long time job almost a year for Boomers, compared with roughly 5 months for 16- to 24-year-olds.

2. Growing financial conservatism Boomers have become more conservative in their investments as a group. While this is a good long term strategy, in “getting religion” after the fact, many didn’t participate fully in the subsequent market rebound.

3. Aging parents and Millennial children both live at home Many Boomers are faced with the dependence of their own parents coupled with children not ready to leave the nest (Millennials Living with Ma & Pa) creating more multi-generation households.

For many Boomers their upcoming “golden years” have turned to pewter. They are working longer and living longer. But with greater longevity and weakened savings, they are facing a more modest future than they may have imagined just a few years ago. Marketers still should view this demographic as important one as many many Boomers still have the means and time to consume products and services. The size of Boomers at 77 Million make then a powerful group. But even the most affluent Boomers are looking for value and savings. By the way, there’s nothing wrong the “early bird” dinner specials.

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