One explanation for this difference is that the older boomers have more equity in their homes and were not hurt as much by the Great Recession. The younger boomers are also paying their kids' exorbitant college tuition, which the older generation has already finished paying (and the amounts were significantly smaller even when adjusted for inflation).
There is yet another explanation. Members of the younger
boomer group feel uneasy about their personal finances
because they see a massive wave of older boomers in front of
them depleting public retirement resources.
Gallup: - The population of Americans aged 65 and older will swell dramatically in the next 15 years as the older generation of today is replaced by the huge number of baby boomers who were born between 1946 and 1964. Any signs of heightened financial worries on the part of baby boomers as they age could be cause for concern, given that there are so many of them, and given concerns that future retirees may not have adequate financial resources to sustain themselves in an era with fewer pensions and potentially less income from sources like Social Security.
The chart below shows the assets of the three major
government trust funds as a percentage of annual cost to
support these programs. It also shows the life expectancy
estimates for the youngest and the oldest baby boomers.
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| Source: U.S. Social Security Administration |
- OASI = Old-Age and Survivors Insurance (Social Security retirement trust fund)
- DI = Disability Insurance (Social Security disability trust fund)
- HI = Hospital Insurance trust fund (part of Medicare)
The oldest baby boomers are likely to benefit from the
Hospital Insurance program and will certainly take full
advantage of the Social Security retirement fund. The
younger boomers however will see these programs go bust
while they still have years to live. It's unlikely the
federal government will have the will or the resources to
provide them the same benefits that the older boomers
enjoyed without the support of these trust funds. That means
the younger group has no choice but to put away money in
order to fund their retirement. And that certainly adds a
bit of stress to their current financial situation as the
Gallup poll clearly shows.
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