Baby boomers in retirement

I was born at the tail end of the baby boomer generation and am thankful to be part of it.  In my opinion (and I think others smarter than me agree), boomers have enjoyed unprecedented prosperity and security.  This generation has benefited from access to affordable college tuition, international travel, relatively low inflation and mortgage rates (okay, ignore the seventies), a relatively stable investment horizon and, more importantly, global security (generally).

We have been the beneficiaries of important medical innovations and have grown up with major technological advancements that we embraced as crucial to our quality of life.  As such, our life expectancy continues to increase and we remain a significant economic force.  The boomer generation makes up 30% of global travel expenditures, and in 2025 accounted for over half of US household wealth (according to an article in Money magazine).

There are those who projected that boomers would, by this point, be transferring wealth to their offspring – Gen X and Millennials.  But, as stated in the same article in Money magazine, that does not seem to be happening for a number of reasons. One of the main reasons is that boomers are not giving up on enjoying themselves, and another is longevity.  However, with that comes a concern that this longevity will translate into future health care costs, particularly long-term care costs, which are challenging to plan for.  The fear of out-living retirement savings contributes to this concern.  Two of my grandparents lived into their 90s, which motivates me to plan for the long-term.

On top of that, and according to The Atlantic, this generation is now on a slippery slope in terms of economic stability.  The publication points to a triple threat of insecurity relative to: a) social security; b) 401(k) assets and c) sources of long-term care.  The way The Atlantic puts it, we have tread into a situation of “vulnerability at exactly the wrong moment in history”.

Beginning with Social Security, I think the storm clouds have been on the horizon long enough for many boomers.  If one did not have a pension related benefit (which I did not) and did not have confidence in relying on Social Security benefits in retirement, hopefully saving like crazy was the fall back.  I am in this latter camp, as I have documented in numerous blog posts about my preparation for retirement.  I have read that the revamp of Social Security may make it more challenging to get support (this is not a policy paper, only an observation).  We shall see….an economic shock could produce instant challenges for advanced-age boomers relying on Social Security.

I am still in the early phase of my retirement, what I call my ‘relaunch’, so still have most of my portfolio invested in equities.  Those who are further along in their retirement may have balanced more toward fixed income investments, which could present risks in a more volatile inflation environment, one that may be exacerbated by the current administration policy on tariffs (again this is not a policy paper, only an observation).

For me, the biggest unknown relates to the latter of the three threats outlined above – sources of long-term care.  Being in my early 60s, I have not been motivated to explore this avenue yet as I feel very healthy and engage in vigorous activity.  I am fortunate to have had no cause to worry about my health short-term.

But as I approach the age of 70, I feel it may be time to consider the prospect and adjust for it in future plans. We boomers do not really have a playbook for this as, thanks to medical advancements, we are pushing the envelope in terms of life expectancy, and levels of health into old age.

So, we boomers have had a good run. Let's hope that this good fortune does not evolve into a double-edged sword as some are predicting.