Baby Boomers may be the most studied consumer segment in history. Because of its size (and therefore influence), this generation has had a huge impact on the nation’s culture and economy over the last fifty years. And that influence will continue. Currently, the 55+ age group controls more than three-fourths of America’s wealth. Just as astounding, that disparity will remain constant — or even grow – as Boomers’ investments mature.
Trend #1: Working retirement
The Silent Generation (born 1925 – 1945) typically stopped working when they retired. They have spent their golden years with family and remaining friends. That’s not necessarily the case with the seven million Baby Boomers now moving through retirement. They are behaving differently. In fact, 65% of Boomers plan to work past age 65. A big reason for this trend was noted in a study by Voya Financial. The study found that 60% of retired workers ended their careers early due to layoffs and health concerns. As a result, it’s likely that their nest egg wasn’t as big as expected and they need supplemental income to make ends meet.
So even though the majority of Boomers will have passed 65 by 2025, many will still be spending a good deal of time at a job. On one hand, that’s less free time for travel and leisure activities. Also, it will remain a challenge to attract their attention due to this busy lifestyle. On the other hand, it means that Boomers will still need to purchase transportation and clothing for work.
Trend #2: Changes in purchasing habits
Just as the housing market soared when Boomers moved to the suburbs to raise their families, other sectors of the economy will do well as this segment moves into the next phase — retirement. The upticks have already begun. As the Boomers’ leading edge retires, we’ve seen solid growth in the retirement housing sector.
Boomers are looking for more options when it comes to retirement living compared to the Silent Generation. They expect retirement communities to feel like a home away from home not just a place to eat and sleep. They want more varied living arrangements — everything from living quarters to medical care to restaurants and entertainment and community complexes. They are also seeking a lifestyle that puts a premium on relaxation and security.
Medical is another area that will absorb more of Boomers’ income. In addition to the normal costs of doctor fees, medications, and surgeries, they are more likely to spend more for innovative and reliable medical technology and healthcare support.
As Boomers age, they will also spend more time, and potentially money, online. Their shopping preferences reflect an interest in catching up with family members via social media (particularly Facebook), traveling and even adopting new household pets.
Trend #3: Skew even more female
It is well documented that women live longer than men, 5 years according to the CDC. And with US life expectancy at 78 years, the front end of the Boomer segment will start to reach this unfortunate milestone by 2025. That means an even greater percentage of Boomers will be women.
Trend #4: Bump in big ticket purchases
The slice of Boomers who are already affluent will see an additional influx of money as inheritances start to flow in. In previous generations, this typically fueled an increase in big ticket purchases such as travel, special jewelry and home improvements according to Forbes. Look for a similar bump in the coming few years among this sub-segment of Boomers. DIY chains, cruise lines and high-end retailers are all well positioned to take advantage of this trend.
Ever since they arrived on the scene, Boomers have had an out-sized influence the economy. For all of the reasons outlined above, that is likely to continue into the foreseeable future. And don’t overlook the Gen X crew. One-third of all Gen X will be 50+ in 5 years.
Article courtesy of Coming of Age 50+ marketing agency