Thu, July 03, 2008
It’s Official: Boomers are the Gloomiest Generation
The Pew Research Center Social and Demographic Trends Project reported last week that Baby Boomers, who turn 44 to 62 this year, are slightly (but significantly) more pessimistic about their lives than other adults.
D’Vera Cohn, summarizing the findings, noted that Boomers are more likely than others to believe that their standard of living is worse than their parents’ and are less optimistic that their salaries will keep up with the cost of living. We are also more likely to believe that it’s harder for middle-class people to maintain their living standard than it was five years ago.
When the Boomer results are divided into data for younger (age 43-52) and older (53-62) subgroups, an interested pattern emerges: older Boomers tend to be more pessimistic than younger ones. One of the widest divergences was in response to a question about expectations for the future. Among the younger group, 60% felt that the next five years will be better, while 10% thought it will be worse; among older Boomers, only 34% said “better,” while 20% expect circumstances to worsen. One significant difference between the two subgroups is that 31% of the older ones are already retired versus only about 4% of the 43-to-52 cohort. The older group is more likely to be dealing with simultaneous challenges of reduced incomes, aging parents, and “boomerang” children; this could explain their higher level of angst.
Interestingly, the gloominess of Boomers is not a new phenomenon; the report notes that studies done as much as 20 years ago also found Boomers to be less happy and less optimistic than other generations.
Here’s another hypothesis for why Boomers tend to be pessimistic, especially now that we’re middle-aged: many don’t expect to receive pensions, don’t have enough saved for retirement, and don’t believe Social Security will provide much income when we do retire. An Employee Benefit Research Institute study conducted in 2003 found that only 40% of workers had a defined-benefit (pension) plan as their primary retirement plan, down from almost 57% in 1988.
2001 data from the Federal Reserve Board’s Survey of Consumer Finances indicated that households headed by people born between 1947 and 1956 had median retirement account balances of $48,000 and a median household net worth of $132,000. Obviously, median data obscure the details of individual household finances, but the numbers suggest that there are a lot of people in this age bracket who won’t be in a position to retire at 65 if they desire to do so.
If, as some social scientists have concluded, Boomers have always been more stressed-out than other generations, this plays us right into the hands of companies that sell financial products. Insurance companies and large mutual fund companies give a lot of marketing attention to the Boomer Generation, and fear is certainly one way to drum up business for their products.
Boomers are old enough to recognize that prospects for life in retirement don’t appear as rosy as they did for their parent’s generation. Of course, that may not turn out to be such a big problem if we can find creative and enjoyable ways to retire. Partial retirement and late-in-life career changes seem to be on the rise.
Anyway, with such low expectations for the future, perhaps we’re more likely to be pleasantly surprised!