Boomers: 26 Percent of the Population, 40 Percent of the Economy

by Bill Ness on May 7, 2012

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Baby Boomers support the economy in a wide variety of ways, such as by making generous purchases for their grown children and grandchildren.

Baby Boomers grew up during periods of dramatic social change and they are often known as being a generation of trendsetters. Yet Baby Boomers may not realize that they are the single largest economic group in the United States. They have more discretionary income and their spending habits can greatly effect the changing economy.

According to Baby Boomer Magazine, the Baby Boomer generation currently has more discretionary income than any other age group. They control most of the net worth of American households and they account for 40 percent of total consumer demand.

Baby Boomers have been known to revitalize areas when they move in and build new homes. They support their own local communities as they pay for their home utilities and buy gas for their cars. They tend to eat out more than younger people, which supports local restaurants, and take advantage of many services such as spa treatments and salon visits. Baby Boomers also travel more than other age groups, supporting cities and towns throughout the country as well.

Marketing campaigns frequently target Baby Boomers and their spending has often been a boon to the economy. This is particularly important during economic downturns when spending can support local businesses and help stimulate the general economy. However, some experts wonder how trends will change as this spending generation continues to mature.

Baby Boomers are reaching the ages when they are inclined to spend less on accumulating more “stuff.” Having already filled their homes and raised their families, Baby Boomers often turn more toward buying experiences than physical items. This may mean that their spending will continue to turn toward travel, dining out and activities like golf, tennis or lifelong learning classes. Sporting events, concerts and other live performances are other experiences which Baby Boomers now enjoy as part of an active adult lifestyle.

Of course, Baby Boomers who no longer buy many items for themselves are still likely to spend money on their loved ones. As empty nesters become grandparents, they tend to turn their spending power toward gifts for their grandchildren. Some retired Baby Boomers even take on babysitting responsibilities which leads to spending on family-friendly activities like trips to zoos and amusement parks.

Though Baby Boomers are the country’s single largest economic group, they may not be aware of how their spending affects the rest of the economy. Even financial experts may not yet know just how the economy will be affected as Baby Boomers mature and continue to change their spending habits.

{ 3 comments… read them below or add one }

Bill Pearson May 8, 2012 at 12:38 pm

Very interesting article. As boomers we grew up in a time where the establishment was the enemy; we morphed into the establishment and now we have the financial power to save the world.

The problem for many of us is we want to down size as we move into that next phase of our lives. The classic example was shortly after moving to Sun City AZ we went to Direct Buy for a preview of what they had to offer. There was no question there was a value to joining but realistically we wondered how much we would actully need to buy.

We didn’t join for that very reason. Oddly, we probably would have benefitted given the amount of money we have spent remodeling the house, but it’s been over a period of ten years rather than those working years where we moved (and purchased) more quickly.

Seems funny to say that: one would think it would be just the opposite. When you’re young, hurrying seems to be what you do. In retirement i find slowing down and savoring things is just a better way to live.

Clearly, boomers do have the potential to make a difference. The wild card is how the later boomers will be affected by the changing social and economic problems we are facing. We do know there is no one size fits all for the boomers.

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Munam Goodwin May 9, 2012 at 3:27 pm

So true, what can I say. I also find that I expect to be treated more respectfully by service and sales people. My philosophy is that I worked long and hard to get to this point where I can really afford pretty much what I want.

My husband and I are about to retire in a 55+ community in Broomfield, CO. We are buying our home in our “dream retirement community” of retired or semi-retired professionals like we are or would be shortly; we travel, we go to the symphony, we see Broadway shows, and we got to this point by planning and saving and investing and not buying into the ostentatious spending of unnecessary stuff except for that one more plant in my garden.

And now my husband wants me to decide whether I want or need 4 ovens that include convection, microwave, wall mounted, and regular with gas range.That is an easy question. NO. But I need to know where the nearest spa, hair salon, restaurant, veterinarian for our cat, performance theater, symphony hall, etc. is located. And please add a used piano dealer on that list. I need a used baby grand for my life’s next chapter.

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Tyler Durden October 28, 2013 at 7:41 pm

It is preoccupation with possessions, more than anything else, that prevents us from living freely and nobly.
~Bertrand Russell

The things you own end up owning you…
~Tyler Durden

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