For generations, Americans worked hard, lived within their means, saved for retirement, spent their golden years in relative comfort, and passed on a healthy inheritance to their children. Many Classic Boomers held only one or two jobs during their careers; received healthy raises, bonuses, and pensions; and didn’t have to worry about healthcare costs gutting their assets. These were traditionally-held patterns and goals. Based on these behaviors, many in succeeding generations could count on an inheritance to help finance large expenditures such as buying a house or paying for their children’s educations. Now? Maybe not so much. Ironically, in the days before the first wave of Boomers began to retire, economists warned against the impact of the largest transfer of wealth in our nation’s history.
The Great Recession changed the financial landscape dramatically. During the good years, many Boomers didn’t save sufficiently, treated their homes like a piggy bank, and “lived large”. When the Great Recession hit, investments lost value, the housing market tanked, and many people were laid off. Two-income families struggled to live on only one income and keep up with burgeoning mortgage payments. So, what happened to the goal of leaving an inheritance? That’s not as important to Boomers now as many face their retirement years with insufficient assets, and the fear that they will outlive their resources.
[iframe width=”600″ height=”400″ frameborder=”0″ scrolling=”no” marginheight=”0″ marginwidth=”0″ src=http://esrimedia.maps.arcgis.com/home/webmap/templates/OnePane/basicviewer/embed.html?webmap=4729319984d14c48b3da8c520efa9aaa&gcsextent=-132.6508,23.5781,-67.7435,52.385&home=true&displayslider=true&displayscalebar=true&displaylegend=true&displaysearch=true] Even though Baby Boomers are located in every state, significant numbers are found in western US states and in Maine. For example, 40 percent of the population in ZIP code 81223 (Cotopaxi, CO) are Boomers, compared to only 8.8 percent in ZIP code 66502 (Manhattan, KS). Zoom into this interactive map of the US and click on a ZIP code to see demographic and healthcare spending information. View larger map
New stats paint an alarming picture: According to the Employee Benefit Research Institute (EBRI), more than 40 percent of retirees are at risk of running out of money for their daily needs and out-of-pocket spending for healthcare or long-term care. The National Retirement Risk Index from the Center for Retirement Research (CRR) at Boston College notes that more than half (53 percent) of households risk falling more than 10 percent short of the retirement income they’ll need to maintain their standard of living.
People are living longer, healthcare costs are a major concern, and savings have dwindled. What were once considered “inheritable” assets, many Boomers must now use for their own living expenses. However, this new trend is not all bad news. Boomers can rein in their spending, ramp up savings, delay retirement, or if possible, go back to work, even part time.
How do these changes impact areas and populations? If GenX’ers and GenY/Millennials can’t count on an inheritance, perhaps they should start funding their own retirement now. The earlier they implement a plan, the better. Areas with large populations of Boomers and other seniors must adjust or add services to accommodate growing segments of seniors. And lower consumer spending coupled with changes to housing needs and a growing demand for healthcare may strain local budgets.
How can you locate these demographic cohorts? Esri’s 2014/2019 Updated Demographics can provide some answers. Esri’s 2014/2019 Updated Demographics database includes a full roster of current year estimates and five-year projections for categories such as population, income, race/ethnicity, home value, net worth, disposable income, and more.
Create maps with your own data combined with Esri’s Updated Demographics data to enrich your findings. Emphasize major points with infographics, use the maps to illustrate your points and collaborate with colleagues, and share the results to better understand and implement your strategies.
You can access Esri’s 2014/2019 Updated Demographics data in multiple ways, including ready-to-use maps, infographics, reports, data enrichment, or the complete database.