What Is a Baby Boomer?
“Baby boomer” is a term used to describe those who were born from 1946 to 1964. They formed the largest generational group in U.S. history until the millennial generation slightly surpassed them. The baby boomer generation makes up a substantial portion of the world’s population, especially in developed nations.
They've had and continue to have a significant impact on the economy.
Key Takeaways
- “Baby boomer” refers to a member of the generation that was born between the end of World War II and the mid-1960s.
- Baby boomers remain economically and politically influential because of their large numbers and the relative prosperity of the U.S. economy during their working careers.
- Many are facing serious financial challenges, however, as more and more baby boomers reach retirement age.
- Several million baby boomers have died but immigration to the U.S. has helped replenish the supply.
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Baby Boomer Facts and Figures
The generation of baby boomers emerged after theend of World War II when birth rates around the world spiked. The explosion of infants became known as the baby boom when 76 million babies were born in the United States alone.
Several million baby boomers have died in the decades since but immigration to the U.S. has helped replenish the supply. The U.S. Census Bureau estimates that the baby boom population has reached about 73 million based on 2020 census data, the latest info available.
Most historians say that the baby boomer phenomenon likely involved a combination of factors: people wanting to start the families that they'd put offduring World War II and the Great Depression and a sense of confidence that the coming era would be peaceful and prosperous. The late 1940s and 1950s did indeed see a general increase in wages, thriving businesses, and an increase in the variety and quantity of products for consumers.
Accompanying this new economic prosperity was a migration of young families from the cities to the suburbs. The G.I. Bill allowed many returning veterans, although not Blacks, to buy affordable homes in tracts around the edges of cities. This led to a suburban ethos of the "ideal" family consisting of the husband as the provider, the wife as a stay-at-home housekeeper, and their children.
Businesses also targeted their children with their advertising and marketing efforts as suburban families began to use forms of credit to purchase consumer goods such as cars, home appliances, and television sets. Many boomers became dissatisfied with this ethos and the consumer culture associated with it as they approached adolescence. This fueled the youth counterculture movement of the 1960s.
Boomers are the longest-living generation in history so far and they're at the forefront of what has been called a longevity economy. Baby boomers spent about $8.7 trillion in 2020 on goods and services, a figure that’s expected to increase to $15 trillion by 2030, according to a 2021 report from The Brookings Institution.
Baby boomers held 51.8% of household wealth at the end of 2023, evidence that they continue to hold substantial economic and political power even as they get older. They were distantly followed by GenX at 25.7%.
What Baby Boomer Retirement Is Looking Like
Every baby boomer will be 65 or older by 2030. Their retirement experience will be very different from that of their parents, the Greatest Generation, in many ways.
Likelihood of Longer Retirement
Increasing life expectancy has made it likely that baby boomers will spend more time in retirement than their parents did. The average life expectancy was 77.5 years as of 2022 in the U.S., 1.1 years more than in 2021.
Greater longevity coupled with good health and an accommodating job market also opens up the possibility for baby boomers to remain in the workforce longer. Doing so won't just provide them with more current income and more time to plump up their retirement accounts. It will also reduce the time that they'll have to depend on their savings to support them.
Decline of Traditional Pensions
Baby boomers witnessed the decline of traditional defined-benefit pensions during their working years where the employer promised workers a certain amount of regular income upon retirement. The employer was responsible for funding the pension plan as well as choosing and managing its investments. Many of the baby boomers’ parents had retired comfortably on such pensions.
Defined-contribution plans such as 401(k) plans came along in their place. They're largely funded by the employees themselves from their paychecks, often with some form of matching contribution from the employer. Employees are typically given a choice of investments, such as an assortment of mutual funds, making it their responsibility to contribute enough money and invest it wisely. It was a boomer's tough luck if they failed to do so.
In 1975, 27.2 million private-sector workers participated in defined-benefit pension plans. That number dropped to 12.6 million by 2019. The number of defined-contribution plan participants rose from 11.2 million to 85.5 million over that same period.
Among baby boomer households with retirement savings, the Transamerica Center for Retirement Studies estimates their median value at $289,000. The center also reports that 41% of boomers expect their primary source of retirement income will be Social Security benefits.
Concern Over the Viability of Social Security
The money to pay Social Security retirement benefits comes from two sources: a Social Security trust fund known as the Old-Age and Survivors Insurance or OASI trust fund and out of the income that’s paid into the system by current workers.
Social Security’s trustees estimate that the trust fund will run out of money in 2033. The income from current workers will be able to cover only 77% of current retirement benefits at that time.
Part of the problem is the size of the baby boom retiree cohort versus the number of current workers. There were 8.6 active workers for every retiree in 1955. That number dropped to 2.7 workers per retiree in 2023, according to Social Security Administration estimates, and it may be down to 2.3 by 2035.
Who Named the Baby Boom?
The term “baby boom” goes back to the years immediately following World War I when England experienced one. It began to appear in U.S. newspapers toward the end of World War II and may have been given greater currency when widely read financial columnist Sylvia Porter used it in a 1951 article on the boom’s economic impact.
The term “baby boomer” is more recent, dating back to at least the 1970s. It got a boost in 1980 when author Landon Y. Jones published his bestselling book Great Expectations: America & the Baby Boom Generation and it has remained with us ever since.
What Are Echo Boomers?
Echo boomers are the children of baby boomers, generally born in the years from 1976 to 2001, a period of rising birth rates. The earliest echo boomers can be considered members of Gen X. Later ones are either millennials or part of Gen Z.
What Is Generation Jones?
Generation Jones, or GenJones, refers to baby boomers born in the U.S. in the years 1954 to 1965. The term was coined by writer Jonathan Pontell who maintains that these later boomers are different enough from their early boomer counterparts to constitute their own generation.
The Bottom Line
The generation of baby boomers remains a powerful force in the U.S. economy and will most likely continue to be one for years to come. Boomers are the longest-living generation in history so far and increasing life expectancy makes it likely that they'll spend more time in retirement than their parents did, raising concerns about the ongoing viability of the Social Security system.
