You can’t take it with you

Some interesting stats for your consumption and consideration:

  • Seniors control over 70% of all disposable income with $1.6 trillion in spending power with more than $1 trillion of that spend on goods and services.
  • Seniors purchase more than 40% of all new cars and over 80% of the luxury new cars.
  • Seniors account for more than 80% of leisure travel.
  • Seniors purchase 74% of all prescriptions.
  • Seniors spend more time online than teenagers.

Moreover, while previous generations handed their homes down to their children, reverse mortgages enable seniors not only to continue occupying the family home until death, but also pay for a vacation condo.  “My goal is when they carry me away in that box that my bank account is going to say zero,” says one Boomer.  The extent to which this is indicative may cause worry:  “only 49% [of millionaire boomers surveyed] said it was important to leave money to their children when they die.”

Obviously, tax policy, including death taxes, plays a role in shaping these attitudes.  But it probably takes a back seat to cultural and generational attitudes. 

Whatever the reason, the trend suggests Boomers may be creating a bubble that will break soon after they’re gone.  A relatively wealthy and famously numerous segment of America’s population, Boomers will spike demand for certain products and services as they run down their bank accounts in anticipation of shaking off the mortal coil.  Successor generations may continue that demand for some of those products and services, such as certain pharmaceuticals.  But it’s likely that Boomers’ less wealthy and less numerous children will be unable to sustain demand for luxury cars, travel, and little blue pills. 

It’s no housing bubble, but it may be one more thing Boomers get ragged on for, even after they’re gone.

Tim Kowal

Tim Kowal is a husband, father, and attorney in Orange County, California, Vice President of the Orange County Federalist Society, commissioner on the OC Human Relations Commission, and Treasurer of Huntington Beach Tomorrow. The views expressed on this blog are his own. You can follow this blog via RSS, Facebook, or Twitter. Email is welcome at timkowal at


  1. Here is my worry:

    What percentage of stocks are owned by Boomers? At what point in the near future are they likely to start selling? (To what extent is it “already”?)

    If the price goes down significantly, will there be sufficient Xers and Millennials buying these newly bargain stocks to keep the price from inspiring a panic?

    • I worry about this all the time, but surely it’s already happening – someone born in ’45 is 66 or 67 now and most of them are in retirement. My parents are already retired at 62. Prudence implies that they’ve been shifting out of stocks and into safer assets for a decade.
      I think that’s probably an underreported factor in the massive push over that decade or so for non-equity “safe” returns that fueled the real estate bubble. Tons of boomers were hitting that point where they were supposed to be shifting over from stocks to bonds and money markets for safety – upset at facing 1-2% returns on top of the dot-com bubble bursting – they foolishly threw their money at anyone promising 5% annual returns at no risk.

      • yes, and no. calpers bears some of the blame, but the hedge funds bear a lot more.

    • Reagan’s stupid stock bubble is deflating. yup. Ponzi schemes are fun, aren’t they?

  2. This is tangential at best, and I apologize for the diversion, but the is one of the reasons why I think the whole “desirable demographics” (typically defined as young and cool people) for TV ratings is a self-delusion so that they can keep putting out cool stuff that they like instead of more Beverly Hillbilly stuff that older people would enjoy.

    • Here’s kinda how old people think. We were once young and full of life but our wallets were sorta empty. Now those wallets aren’t empty but we’re not so spry on our feet. But we’re not stuck in the past. I know of no old people grumbling about Kids These Days. We like kids these days. They have great taste and they’re producing an astonishing diversity of art and music, much of which is very much to our liking.

      Truth is, the 60s and especially the 70s were horrible times with a few notable exception, notable only for their rarity. Most of the music was terrible: with the exception of college radio, the whole system was corrupt, pay-to-play. The 50s were pretty bad but there was some pretty good jazz being made. Fearful times they were, Mad Men really doesn’t convey just how wretched and cramped they were. The fashions were abysmal for the most part. Cars were huge and ugly. Where style and beauty put in an appearance, they weren’t widely accepted. It was especially hard to be a woman then.

      We were readers, then. All of us wanted to be writers and all our heroes were men of letters. It’s good to see young writers making a reappearance.

      I do miss music videos, from the 80s, not so much the videos themselves but the idea of music video never caught on as I hoped it would.

      If there’s one aspect of the entertainment industry which got wrapped around the axle, it was television. The “desirable demographic” set in motion something grotesque to which you allude, this hideously banal pseudo-cool. If they really wanted to make good television, they’d put the writers back in charge of the shows and not the stylists and we’d have something worth watching. In their idiotic search for numbers, TV has forgotten how to make product. It’s not cool, not even now. It will only look stupider in a few years.

      So I’m standing in the aisles of the grocery store the other day, listening to David Bowie’s Golden Years. A great urge to hurl a can of peas at the speaker nearly overwhelmed me. I am not stupid. Putting on a song I once loved will not make me buy more product.

      America, quit condescending to oldsters. We’re sick and tired of it. I didn’t like the Beverly Hillbillies back in the day, I’ve had to live with two go-rounds of bell bottoms coming in and out of style and pray to Bebby Jeezus each night that wide ties and platform shoes don’t come back. Hollywood never understood me or what I wanted, though Zappa was up in Laurel Canyon making some interesting music.

      TV wants “desirable demographics”? It’s high time they made some desirable product. Obviously, nobody likes what’s coming out the ass end of that industry, anyone with a clue has moved to cable. And quit pandering to kids these days, while you’re at it.

      • The idea of music as rebellious and transgressive has been dead ever since Ozzy Osbourne’s “Crazy Train” was used in a minivan commercial.(*) And used non-ironically; it wasn’t a joke that they were using the song (as it was with Judas Priest), that was just the music in the commercial (albeit only the opening riff and then they vamped the pre-lyrics bars.)

        (*) yes, I know it was technically an SUV. But considering the capabilities of the vehicle and its likely employment and probable primary driver, it was a minivan wearing an SUV costume.

  3. Isn’t this what life insurance is for? Yes, I know not everyone can afford it. But at least the Boomers are rich, right?

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