Boomers aren't spending -- this is a surprise?

Sure, we stopped spending as much, but we've learned to value other things more

August 23, 2010|Susan Reimer

The Wall Street Journal reports that baby boomers have not emerged from the fetal position they assumed in 2008, when they found their homes and their retirement funds suddenly to be worth half as much.

We boomers stopped spending — we haven't opened our wallets since — and because boomers represent such a huge chunk of the American population, that's bad news for an economy powered by consumer spending.

Our plans for retirement were already in trouble because we hadn't saved enough during our working lives, and the stock market collapse made the future that much more troubling.

We have slowly, if grudgingly, come to understand that we would be working much longer than we hoped. "If you have a job, keep it," said the gentleman who manages my family's hummingbird-sized nest egg.

But this slow-as-molasses-in-January recovery is not producing jobs. In fact, it is still shedding them — jobless claims in July were the highest since November — which means boomers may not be able to keep this unhappy commitment to working longer.

Economists promised us in 2008 that our lives, built on credit cards and phantom home values, would be changed forever. That this wasn't a brief leg cramp in a gamboling economy. That we would never again live as if the bills would never come due.

Now, they seem kind of surprised that we took them seriously.

According to the Journal, people ages 65 to 74 were spending 12.3 percent less in 2008 than they did 10 years earlier. That was the last year for which such numbers are available, and it is also before the full impact of this recession was known. I imagine that number is much greater now. Perhaps we are spending only a quarter or a third of what we spent a decade ago?

Also according to the Journal, we aren't spending it on cars, furniture or dining out (although we are spending it on health insurance and health care) because — this from The New York Times — we have learned to value experience over possessions.

As a result, boomers like me will drop plenty to cart the family to California to spend Christmas with my son and his wife, but I haven't been to the mall since I needed the battery changed in my watch months ago.

I will have dinner out with a friend, but I'd rather re-cover my kitchen chairs than spend the money on new.

All of this seems like a reasonable reaction to economy turmoil (as a nation, we are saving 6 percent of our earnings instead of below zero percent) and a wholesome new focus on friends, family and the quality of life.

So why do I feel so guilty? Why do I feel as if the U.S. economy was counting on me and my empty-nester cohort to spend the country's way out of this mess?

Why not, you say? The kids are grown and gone, right?

But that's the other part of this story that isn't going according to script.

The kids haven't left. And until we get out of the work force, the kids will never earn enough to start a life of their own.

The trouble with being a boomer is, until we are all dead and gone, everything will be our fault.

Susan Reimer's column appears Mondays. Her e-mail is susan.reimer@baltsun.com. Twitter.com/susanreimer.

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