When deciding to frame a retirement income column solely around baby boomers, one may be inclined to ask, why limit yourself? What about Generations X and Y? Don’t the young workers face similar savings challenges as their older brethren?
Well, writing about 76 million people, or the estimated number of Americans comprising the baby boom generation, is not really limiting oneself. There is also a sense that “baby boomer” has become an unfortunate catch-all label that downplays the socioeconomic diversity of the group.
In reality, there are many layers to peel back. There is a deep well of issues to explore. It’s what Neal Cutler, dean of the American Institute of Financial Gerontology at the University of North Carolina at Greensboro and director of the Center on Aging of the Motion Picture & Television Fund, calls the “heterogeneity” of the boomers.
“That’s 18 years of birth and they are quite different generations politically and economically,” Cutler says.
In fact, there is such multiformity among the baby boomers that not everyone even agrees on who exactly belongs in this group. Although the United States Census Bureau designates baby boomers as Americans born between 1946 and 1964, Jonathan Pontell, a cultural commentator, coined the term “Generation Jones” for those born between 1954 and the beginning of Generation X in 1965. He has referred to this group as being a sort of “lost generation,” disconnected from both boomers and Gen Xers. President Obama would be the most famous member of Generation Jones.
“The Jonesers were more the Reagan kids and the boomers were more the Kennedy/Johnson kids,” Cutler explains.
For this column we are going to use the traditional designation of baby boomers. We will, however, closely examine the issues and concerns that both unite and divide younger and older boomers. Right off the bat, Cutler identifies two distinct classes of people: The older boomers with defined benefit pensions who have been able to save, and those in the now larger, younger group who have put their money into stocks and—for many—seen the value of their assets go down.
“We’re talking about a group that’s larger than the country of Peru, or whatever metaphor you want to use,” Cutler says. “There are still [76 million] people and there’s such variation, not only by age and generation, but also in terms of where they stand on the savings scale.”
Boomers who have parents and grandkids undeniably have a whole different set of financial concerns than those whose parents are dead, who don’t have grandkids, and are in their 50s. Cutler emphasizes the importance of advisors paying attention to the boomers’ children and grandchildren, especially after the economic downturn drained funds that had been set up for grandchildren by their grandparents.
Of course, the economic downturn would be one issue that unites all boomers, regardless of the decade in which they were born. Earlier this year, The Boomer Project, a marketing research firm, presented analysis showing 77% of advisors say the downturn has had a more significant impact on their boomer clients than on clients from any other generation.
In this column we will speak to industry leaders and experts as they navigate the “silver tsunami.” For financial planners, the baby boom generation represents a seemingly unlimited market to tap. But advisors who truly want to help their clients plan for a better retirement are going to have to understand the challenges that are unique to the various subsets within a generation spread across three decades and 76 million Americans. A 52-year-old boomer who never married is not the same person as a 62-year-old boomer with parents and grandkids, Cutler notes.
“Using the term ‘boomer’ for both is not a mistake, it just raises red flags about how much financial planners and journalists still need to understand about the complexity of this thing,” he says.