Baby boomers have loads of money, and they’ve been spending it a lot lately. That’s great for the economy of this country, but will it continue?
Here are Five Fast Facts on boomer spending:
- ⌛ Last Year - In 2023, Social Security recipients get an almost 9% cost of living bump. On top of this, Medicare Part B declined by over $5 per month, so it’s all positive for them! As a frame of reference, weekly earnings rose 3-4% last year, so this bump almost doubled that.
- ⏳ This Year - The story isn’t quite so happy for this year. The scheduled increase is supposed to be around 3%, and Medicare will go up by almost $10 per month. So while there’s a bit of an increase this year, it’s not nearly what it was last year.
- 💸 Hey, Big Spender - This matters because Boomers have deep pockets. Around 70 million Americans get Social Security benefits, about a fifth of the country. Consumers age 65 or older were about 22% of the total 2022 annual spend. What they do impacts the overall economy big time!
- 🦥 Slow Your Roll - With the projected slowdown in Social Security benefits for this year, boomers’ spending is expected to slow down, as well, especially for higher end retailers. Places like Costco or Sam’s, though, that focus on low-cost necessities, will probably do just fine. But with inflation boosting the cost of medications, housing, and medical care, boomers will definitely have to watch their pennies a bit more than last year.
- 🤯 Silver Lining - One good thing for boomers is that they’ve been slow to dip into their savings. As a generation, they’re sitting on a mountain of assets – $100 trillion – that they’re spending slower than the young’uns. They’ve also got less risk from high mortgage interest rates because about half of them own their homes outright.
🔥Bottom line: We’ll see how the year shakes out, but it seems like this could prompt a bit of a slowdown in the economy. Hopefully things will work out so that doesn’t happen, because if boomers keep spending, that’s good for everyone’s Paychecks!
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