What’s the Outlook for the Baby Boomers’ Babies?

There’s a lot of talk about the many, many Baby Boomers that are already stepping into their retirement years or are looking forward to doing so in the next several years. And while everyone’s talking about the impact this many Boomers will have on the economy, you can’t help but also question the impact their retirements will have on the generation that’s to come after them – their kids. While the Boomers may be creating historical stats, the Baby Boomers’ babies will experience a retirement very different than that of their parents and their grandparents.
It all comes down to the way that different generations have lived their lives. The parents of the Baby Boomers were brought up in a world where saving was everything and you spent only on what you absolutely had to. These people have lived through the Depression, the Potato Famine, and other financial and economic disasters that make the latest recession look not all that bad. They held tight to every dollar they made and worked day until night to make as much as possible. So, when it came time for them to retire, they had the money to. Maybe they already had a mortgage; if not, they could certainly afford to take one on now. And chances are, they can do a lot more than that once they’ve retired because the money is there; they never spent it.
Their children, the Baby Boomers, have lived a little bit differently. They mostly grew up at first with very little means, just like their parents. But as they grew older, technology advanced more, people became busier and they began spending more. Many of the Baby Boomers, even with their meager beginnings, went on to live in grand houses (that came with grand mortgages) and drive the nicest cars on the market. They too, worked very hard for every dollar they earned; they just didn’t save nearly as much as their parents did. Some of the Boomers have put money away for their retirement and if not, CPP is there to help them in their retirement years. And, because their parents may have passed away and still not spent all that money they saved during their lifetime, the Boomers may also have an inheritance to help them in retirement.
Some of that inheritance will undoubtedly filter down to the Baby Boomers’ children, but those children aren’t likely to still have any of it when they hit retirement age. And they too, have also grown up in an environment where technology is not losing any speed, things and people continue to get busier, and people are still spending as much as they can on whatever they can. So where do the Boomers’ kids turn to? Their CPP fund? Unlikely, if you believe the analysts that are saying the Boomers are going to drain that program. And that inheritance? Well as already stated, that’s also probably not still going to be floating around anywhere and there is likely to be little, if any, inheritance coming from their parents who spend just as much as they do. So what are they to do?
Start planning, and start doing it right now. Whether or not CPP will actually be gone when the Boomers’ children reach retirement age is a highly debatable issue, these truths still hold true for the other arguments. So the only thing left to do? Take matters into your own hands, if you’re a child of a Boomer. Start planning for your retirement and more importantly, start saving for your retirement – as if your life depended on it, because it might. This generation may still get lucky enough to get government and inherited help. But it’s clear that these things are not to be as relied upon as before, and a back-up plan needs to be in place.