Boomers Move into Their Golden Years

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Boomers Move into Their Golden Years

Harry S. Dent, Jr. makes the pivotal argument that spending patterns for Boomers will be basically the same as for prior generations and that this will trigger "the great depression ahead," as the title of his new book suggests.

But the Trends editors have consistently argued that the lives of Baby Boomers and the rest of the U.S. population in the first two decades of the 21st century will be unprecedented in human history because of nine crucial factors:

  • People are leading longer, healthier lives, due to quantum leaps in health care.
  • Jobs now depend less on manual labor, and more on experience.
  • The small size of Gen X demands that companies retain the Boomers' knowledge, skills, and experience to remain competitive.
  • America's well-developed entrepreneurial culture and infrastructure encourages and enables business startups, as never before.
  • A whole generation is entering its later years with a self-image that has always been based on work and youth.
  • America is serving increasingly as the de facto "corporate headquarters" of the global economy and increasingly leveraging resources around the world to create value.
  • A global glut of capital is driving down returns on investments, and making it easier for individuals and businesses to borrow or raise equity.
  • The most affluent generation in history will reach its peak in spending later than previous generations because, historically, affluent people keep spending later in life.
  • Boomers are continuing to make family commitments later in life than their parents.

Many Boomers married later and had children later than their parents and grandparents did. This, coupled with the tendency of generations X and Y to live at home well into their 30s, will motivate Baby Boomers to spend more money later in life, if they have it.

Furthermore, lower returns on savings driven by the "global savings glut" will mean that people who want to retire will have to save more money and therefore work longer.

Now, after recent market setbacks, Boomers are reassessing their options and trying to decipher what the next 10 to 15 years will mean for them and reformulate their decisions, so as to resolve this problem. As McKinsey & Company1 research shows, the adjustments don't have to be wrenching in order to have a profound impact. Specifically, "a two-year increase in the median retirement age over the next decade would add almost $13 trillion to real U...

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