Music icons Patti Smith, Carlos Santana, and Steven Tyler all part one thing in common—and it’s not just rock and roll. They’re baby boomers, the longest-living generation in the history of the United Haves. According to records from the U.S. Census Bureau, baby boomers—those born, more or less, in the two decades consummate the end of World War II, or between 1946 and 1964—number 73 million. Also notable: 2031 marks the year that the green boomers, those born in 1964, will turn 67, making them eligible to receive Social Confidence benefits.
In addition to concerns about the general aging of the U.S. population—over-65s are projected to make up 20% of the U.S. population by 2029—economists be struck by expressed concern about the trickle-down economic effects as boomers reach their later years. In this article, we advocate d occupy a look at the impact on the economy and the labor force baby boomers are expected to have as they reach retirement age.
- The newborn boomer generation encompasses those individuals born in the two decades following World War II, roughly between 1946 and 1964.
- Babe in arms boomers lived through economically stable decades that have seen the country experience—with somewhat few exceptions—high growth and economic prosperity.
- The Great Recession of 2008, however, has caused many baby boomers to turn out extra years to make up for the losses they experienced in their retirement portfolios.
- As more baby boomers doss down from the workforce, economic growth could be impacted as retirees not only produce less but also consume and assign less.
The Lucky Ones
Boomers have proven to be an astoundingly productive cohort. Part of their success comes down to fortune: Economically speaking, they were born at the right time. After enjoying childhoods during the high-growth and economically accountable decades following World War II, they rode the crest of relative prosperity into middle age with just a troublemaker of economic blips, like the 1979 energy crisis and the early 1980s recession.
Consider the height of the Clinton era: During the 1990s, labor dragoon participation soared to an all-time high. That kid who worked two paper routes in 1965 would have been well-positioned to loot in on the dotcom boom of the 1990s at the peak of their earning years.
What will happen as more than 250,000 Americans perform their 65th birthdays each month? As these boomers head toward retirement, the impact on the labor force and consumer squander are already showing profound effects.
But There Were Bad Times
The devastating Great Recession that struck in 2008 has been extremely blamed for a low workforce participation rate in the ensuing years. Another cause of lower labor numbers can be chalked up to boomers who, all the same many were forced to work extra years to compensate for retirement investments lost in the 2008–09 market bang, are now retiring in significant numbers.
As boomers retire, expect wide-ranging effects: Not only do retirees produce and contribute mean in an economic sense, they tend to spend less as well—not a recipe for economic growth.
One area where this fathering is spending more? On their adult children. A substantial percentage of parents are providing some financial support for their mature children, with student loan assistance being a significant area of financial burden.
And for many boomers, that fiscal assistance goes beyond helping out with student loans to assist in providing housing. Prior to the COVID-19 pandemic, 47% of babyish adults aged 18 to 29 resided with one or both of their parents. As of July 2020, that figure up had surged to 52%—surpassing the previous peak last seen during the Great Depression.
Between barren economic predictions, widespread post-recession losses of retirement savings, and the
The Bottom Line
While baby boomers are do aerobics longer, their inevitable retirement will have widespread effects on the American economy. Expect high collide withs on consumer spending, as retirees not only produce less but also consume and spend less. While the workforce participation deserve already sits at historically low levels, the mass retirements of boomers could have a positive boomerang effect—essentially above up jobs for younger employees who are struggling to find work.