July 1997 - Volume 2 Issue 3

Boomers at the New Millennium

Since they uttered their first cries, Baby Boomers have commanded center stage in America. And, ever since they were babies, they've been big business. They were the first generation to grow up bathed in their own reflection as it emanated from the television screen. When they were teenagers, they thought the word 'rebellion' was invented just to describe them. They danced to music no one had heard before and called it rock 'n' roll. They were the first generation of women to enter the workforce en masse and attain positions of power. They are the best-educated population in our country. They questioned authority - and still do. Now they're beginning to cross the threshold from youth to the unexplored terrain of the second half of life. And as they go, they continue to change the way the world works.

The Next Revolution
As the millennium approaches, American society is bracing itself for a gravitational shift of enormous proportions. Every aspect of our lives - the way we live, work and deal with our finances - will be deeply affected.

The boomers represent the largest aging population in our country. Already, there are 69.5 million people over the age of 50 in the United States (more than twice the population of Canada). That's just the beginning. Every 8.5 seconds, another boomer - a generation that's one-third of the U.S. population - will celebrate their 50th birthday. At the same time, the population of 18 to 34 year olds is actually shrinking.

The Recycled Life Plan
Boomers will not follow traditional patterns of life; they never have. For one thing, they will live longer than previous generations. Age will no longer act as a barrier to realizing one's dreams. Boomers are "recycling" lifestage activities once reserved for youth into the second half of life. They are returning to school in their 40s and 60s, seeking second careers in their 30s and 50s, and entering the dating game at 45 or 70.

Financial Insecurity
The financial dilemmas facing the boomers are much larger and more complex than any previous generation's Although the boomers are in their peak earning years, the average boomer has only $1,300 in their lifetime savings account. According to a First Wave/Roper Study done in 1996, more than half of all boomers said they felt confused about their financial and investment options. Many, as a result, do nothing. In every study done on the boomers, money is the biggest fear factor related to aging. Many boomers plan a comfortable retirement, yet a Merrill Lynch study found that half of all boomers don't save for retirement. Of those who have savings, only one-third have enough put aside to fund the retirement they envision. At the same time, boomers are aware that the Social Security system, and many private pension plans, are being cut. Will boomers be able to retire? Not as soon as they would like. Many will be forced to extend their working lives well past the present age of retirement and may have to rely on extended families for financial support. As they realize this possibility, they are turning their attention to financial literacy, responsibility and self-sufficiency.

Financial Literacy
Boomers need to develop a new set of financial and lifestyle expectations. They now need to adjust to a complex and confusing economic future in which planning is of utmost importance. They need to be shown how to create long-term financial goals and to work toward them. Boomers are a hopeful generation. They appreciate information and like to understand and explore as many financial options as they can. They prefer to be involved in shaping a financial plan and like tailored services that offer them a sense of control over their financial future. The perfect financial services professional for boomers is one who encourages boomers to save incrementally but routinely, developing investment habits that build a nest egg without depriving boomers of the cash they need to maintain their present lifestyle. Boomers need to understand their impending financial dilemma and take action immediately. They need to invest in a variety of financial options which can help them build their financial future for the long term, which may be longer than we think.