07/15/2005: "Baby Boomers—Planning for the Future"
Remember the adage about the 80-year old who tells a friend that if he had known he would live so long, he would have taken better care of himself. With Americans’ life spans increasing, that sentiment is probably being repeated more often nowadays than in years past.
A corollary to the maxim about physical well-being at an older age relates to economic health—“I just hope my money lasts as long as I do.” Though many people say it jokingly, as baby boomers are beginning to come of age this month, the concern may become more prevalent with each passing year.
Between 1946 and 1964, there was a significantly high rate of births in the US. Those born during this time are usually referred to as baby boomers. Over that 19-year period, the population of the nation increased some 36.44%, and the number of people living in the Lone Star State expanded by 42.70% to add more than 3.07 million and reach approximately 10.27 million. Today, boomers make up around 13.37% of Texas’ 22.96 million residents.
Now composed of middle-agers, the boomer generation plays an important role in sustaining our economy because of its buying power, especially since consumer spending accounts for about two-thirds of the nation’s overall economy. Boomers are particularly significant to the home furnishings and equipment sectors and to the automobile industry.
Among the reasons they purchase so many cars may be the need to facilitate the transportation requirements of their teenage children at home with driver’s licenses as well as their children away in college. I can attest to this assumption based on personal experiences with my five children. To test the validity of this concept yourself, just look at any high school or college parking lot or check out the teenagers vying for parking spaces at the malls.
Another aspect of the economy in which baby boomers are beginning to excel relates to expenditures for medical services. Over the next 25 years, America will turn much grayer as nearly one in five will be at least 65 years of age. Currently, fewer than 12% are at that time in life. As each year passes and boomers grow older, healthcare requirements are anticipated to continue to expand. Meeting those needs will often fall to various state-funded and private organizations.
While future medical needs are probably on the minds of many men and women born between 1946 and 1964, a subject of perhaps even more prominence relates to impending retirement.
This is true especially because this month baby boomers are coming of age, at least those on the leading edge of the generation. Federal law allows those who turn age 59.5 to withdraw from their 401(k) and IRA accounts without the 10% penalty formerly required of such removal of funds. The first boomers passed that milestone this summer. While most will not elect to withdraw funds, they now have the opportunity.
According to a recent survey, the majority of boomers hope to acquire a new house for their retiring years. They also are looking forward to enhancing their lifestyles as a result of their greater ability to travel, having more time to spend with family, or increased capability of moving to a warmer climate. Texas was one of the top five states to which retirees anticipated immigrating.
While some boomers are planning on getting a rocking chair and sitting on the porch to watch life go by, many others are mapping out ways to remain active—from continuing to work full or part time past the traditional retirement age to moving into a retirement village full of amenities conducive to increasing physical exercise and enhancing their social lives.
Preparing for better physical and financial health is something to which we all need to give more consideration, and it’s never too early to start. As a baby boomer myself, I guarantee it!