Boom or Bomb?

I happen to be a baby boomer.  Baby boomers are that demographic cohort born between 1946 and 1964. We are called ‘boomers' because during this period of time, there was a statistically significant increase in the number of births.  Our parents were making babies – resulting in a boom or bulge in the broader, general population.  I am fond of this analogy - boomers are the pig moving through the python.

It should come as no surprise that I have boomer stuff on my mind.  First, I recently retired.  Second, I spent almost four decades counseling people on how to plan for a financially-secure retirement.

Using your imagination I'd like you to think about our world a decade from now.  

In 2019 the youngest of the baby boomers will turn 65.  Stated differently - all of the baby boomers will be age 65 and older.  This also means that for the first time people over 65 will comprise a whopping 20 percent of the population.  This has multiple implications. 

On our journey to 2029 about 10,000 boomers will turn 65 each day.  The growing ranks of retiring boomers is expected to have a direct impact on the number of available workers in the U.S. workforce.  As boomers retire, younger people will climb their career ladders to replace them.  This turnover in the labor force creates opportunity.

Because the Social Security program is primarily funded by payroll taxes assessed on wages there will be a shrinking number of workers contributing payroll taxes and an increasing number of retirees tapping their benefits.  This introduces an element of risk.  The good news is that we know about it and thus can (and should) plan for it.  Without a plan it could lead to a crisis.  Delay simply increases the risk and scale of potential crisis.  

Along those lines only 55% of my boomer cohort has some retirement savings.  And of those who have saved - 42% have less than $100,000 set-aside. As a consequence, roughly half of retired boomers will have to rely on Social Security as their principle source of retirement income.  That is scary.

Compounding this is most of us are living longer than our parent’s generation and certainly our grandparent’s generation.   That aside, boomers suffer higher rates of hypertension, higher cholesterol, obesity and diabetes.  These complexities are going to impact the cost of health care – likely increasing it.  Nevertheless, I smell opportunity - namely swelling jobs in the healthcare sector as boomers age.

You're probably thinking - Hey!  You're scaring me.  Now I'm not going to be able to get to sleep tonite with all of your scary population statistics rolling around in my head. 

Not at all gentle reader.  There is likely opportunity that can spring from crisis.  And a clever individual will embrace the opportunity not the crisis. 

As long as you have your imagination activated – visualize this:  One fifth of the nation telling you to get off their lawn.