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.