Boomers and the American Dream

(Editor’s Note: This story is part of a partnership between Chasing the Dream and Next Avenue.)

By: Richard Eisenberg

Boomers and the American Dream

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So, back to the boomers: Have they lived the American Dream?

It’s ridiculous and impossible to generalize about a generation of 75.4 million people in an 18-year age cohort, with an enormous range of income and wealth and a diversity of races, of course. That said, overall, the homeownership rate of boomers is a strikingly high 78 percent and boomers have profited from decades of sharp rises in housing and stock market values (with some notable exceptionally terrible periods). So it’s easy to say the boomers are, broadly speaking, living the dream.

But research and statistics show that the American Dream has been more achievable for the older, early-wave boomers in their 60s to early 70s than the younger boomers in their 50s.

As Neil Howe, author of a paper called “Generations in Pursuit of the American Dream,” noted, “every cohort through early-wave boomers has seen upward jumps in their lifecycle income — all the way up until 2012. But every younger generation [including the younger boomers] has experienced no such progress.” Howe adds: “First-wave boomers born mainly in the mid-1940s have done best, but late-wave boomers born mainly in the mid-to-late 1950s are underperforming the first-wavers at nearly every age. First-wave boomers in their 40s and 50s, for example, had a median family income nearly $10,000 higher than late-wave boomers later had at the same age.”

Hedrick Smith’s Who Stole the American Dream? describes this story in saddening detail.

Older Boomers Vs. Younger Boomers

The older boomers started their careers young, married young and those who’ve worked in the private sector are among the last who’ll receive guaranteed pensions for the rest of their lives.

The younger boomers, conversely, had higher college costs (and, sometimes, accordant student loans), often began working later, married later, suffered economically from stagflation and have spent most of their careers fending for themselves for retirement. They’ve had to invest on their own, in retirement plans like 401(k)s — which kicked in in 1981 — and IRAs. As you likely know, many haven’t saved very much. The median 401(k) balance for people age 55 to 64 in 2016: $76,000; for people 45 to 54, it’s $60,000, according the Center for Retirement Research.

The younger boomers have also had more of their working years saddled with heavier health insurance premiums and high deductibles. Previously, employers tended to shoulder more of those costs. And the younger boomers were more likely to feel the cruel, massive corporate layoffs of the 1990s.

In a 2016 Freddie Mac survey, 55 percent of older boomers said they were satisfied with the quality of their lives; only 48 percent of younger boomers were. The same survey found that 77 percent of older boomers were confident in their finances in retirement, while 70 percent of younger boomers were. In addition, just 22 percent of older boomers said they live payday to payday; 28 percent of younger boomers said so.

This story is part of our partnership with Next Avenue. Next Avenue is public media’s first and only national journalism service for America’s booming older population. Their daily content delivers vital ideas, context and perspectives on issues that matter most as we age.