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Want to do well financially? Don’t listen to baby boomers

Posted By Claes Bell On 11/06/2013 @ 8:30 am In Personal Finance | 14 Comments

I’m a little annoyed with the baby boomers these days.

While many younger people are having well-documented trouble finding jobs, there seem to be a lot of boomers making good money writing crotchety op-eds [3] about all the ways that millennials fall short. They’re not career oriented enough, they say. They’re too dependent on their parents, they say. They stay single too long, they don’t think enough about the future, and so on.

Then the evidence is trotted out:

  • The unemployment rate among those 16-24 stands at 15 percent, according to the Boston Globe op-ed linked above. 15 percent!
  • They’re living at home too long [4], preventing their boomer parents from living the rockin’ lifestyle promised to them in those cool Just for Men commercials [5]. A whopping 36 percent of 18 to 34-year-olds are living at home right now, according to a Pew study.
  • On average, they’re waiting 5 more years to get married [6] than people did in 1970, and waiting until 25 to have their first kid, probably because they’re just loafing around in their parents’ basements. Those monsters!

Now, I should preface this by saying that many of the people I love and respect the most in this world are boomers, and their generation has made some monumental contributions to American culture. But beyond the irony of the generation that urged everyone to “turn on, tune in and drop out” lecturing younger generations about being insufficiently oriented toward material success, the last place millennials should turn to for advice on anything money-related is the boomer generation.

Let’s run down exactly why that is.

  • Boomers didn’t exactly have the most stellar employment record themselves as young people. While they, along with the rest of the population, benefited from the postwar economic boom and 18 to 24-year-olds saw annual unemployment rates as low as 8.4 percent, by 1975, the unemployment rate among those loafing baby boomers had risen to 16.1 percent, according to BLS statistics. That’s a lot of turning on, tuning in and dropping out that was happening!
  • Boomers were way better than millennials at getting married early, but were even better at getting divorced. In fact, the divorce rate rose to 5 per every 1,000 Americans in 1976, eventually peaking from 1979 to 1981 at 5.3 per 1,000 Americans. Today, the rate stands at 3.6 per 1,000 Americans, a lot lower than it was in boomers’ heyday. And since divorce is one of the most financially devastating things that can happen to you, maybe avoiding a rush into marriage isn’t so dumb after all.
  • Boomers have saved a pathetically small sum for retirement¬†and will be desperately depending on millennials to come across with their Social Security checks in order to maintain anything close to their current standard of living. A 2011 study by the Wall Street Journal and the Center for Retirement Security found that the median retiring boomer’s 401(k) held just $149,400 in 2010.
  • While they often criticize millennials for their dependence on their parents, you’d be hard-pressed to find a generation in history better at leaching off the previous generation than the boomers. According to a 2010 study by Metlife, they’ve received over $2.4 trillion in inheritance from the prewar generation, and stand to inherit a total of $8.4 trillion from their parents, or a median of about $57,932 per household. Not bad!
  • Many of the key figures in the financial crisis which has contributed to high unemployment among all demographics were boomers — former Treasury Secretary Hank Paulson, former SEC chairman Christopher Cox, former CEO of Lehman Brothers Dick Fuld, former CEO of Bear Stearns Alan Schwartz, former Bank of America CEO Ken Lewis and former Washington Mutual CEO Kerry Killinger, to name a few. But the list goes on!

I’m not a believer in making excuses for people, and it’s true that millennials have some work to do establish their careers and a solid financial foundation. But boomers shouldn’t assume today’s young adults are going to do it the same way they did, or that they even want the same things.

In fact, if history is any indication, listening to boomers will probably just leave millenials overextended with two new cars, a house in the ‘burbs and zero savings, spending every spare dollar on cosmetic surgery and vacations to recapture long-lost vestiges of youthful glory, much of which is probably imagined anyway.

So before boomers take to the pages of another publication to criticize millennials for the way they manage their money, their careers and their lives in general, it may be good to take some time to look in the mirror — oh wait, they do plenty of that already — and examine their own choices and the role they’ve played in getting us all where we are today.


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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/financially-listen-baby-boomers.html

[3] crotchety op-eds: http://www.bostonglobe.com/opinion/2013/11/04/idle-millennials-are-victims-their-parents-success/2rWDFWXQHo290FqUpz0HOO/story.html

[4] living at home too long: http://content.time.com/time/magazine/article/0,9171,2143001,00.html

[5] Just for Men commercials: http://www.avclub.com/articles/i-hate-this-commercial-just-for-mens-summer-of-lif,9280/

[6] more years to get married: http://online.wsj.com/news/articles/SB10001424052748704409004576146321725889448

Thank you for reading!