Boomers Move into Their Golden Years

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Boomers Move into Their Golden Years

Since the subprime crisis began to unravel in August 2008, a whole host of doomsayers have come crawling out of the woodwork. Some are perennial economic “quacks.” Others are academics who have happened to get the short-term facts right for once. By and large, those same prophets predicted “Armageddon” in the wake of every financial crisis since their careers began. So, like a stopped clock, they finally got it right.


Harry S. Dent, Jr. makes the pivotal argument that spending patterns for Boomers will basically be the same as for prior generations and that this will trigger “the great depression ahead,” as the title of his 2009 book suggests.


Yet, as we cited earlier, a new model of life-cycle spending patterns developed in 2008 by McKinsey & Company shows that for the average “early Boomer,” spending peaks at age 62 (not 47).1 After having roughly doubled their per capita spending between the ages of 30 and 55, this model indicates that Boomers reduce it on average by about 20 percent over the course of retirement. Why this dramatic shift and what will it mean?


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, making them better suited for older workers.
  • The small size of Gen X encourages companies to 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...

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