The Empty Nesters' "Privilege"

Or, is it the perquisite well deserved and unique to the so called "baby boomers" of our time.

According to the Nasdaq data, 50 percent of the wealth in the U.S. are held by the baby boomer generation, more than any one generational sector of the population. 

"Americans have roughly $156 trillion in assets, according to Visual Capitalist, but half of that wealth — $78.1 trillion — belongs to the baby boomers. The rest is spread out across Generation X, the Silent Generation and Millennials".  

The Gen Z generation is blaming the baby boomers for the tight housing market by holding on to their homes - now predominantly giant empty nests that, according to the young generation, are real estates that could be put to good use, if only the baby boomers vacate them and live out their sunset years in designated retirement communities, where homes are mere fractions of the size. 

Does the young generation have a point?  First of all,  Gen Z must wait their turn because Gen X already has first dibs on the wealth that the baby boomers had accumulated.

Breakdown of Wealth by Generation

"The Visual Capitalist used the Federal Reserve’s data from the final quarter of 2022 to provide a general breakdown of generational wealth. Here’s what they found:

Baby boomers: $78.1 trillion (50%) (Born (1946-1864)

Generation X: $46 trillion (29.5%)  ( 1965-1980)

Silent Generation: $18.6 trillion (11.9%)  (1928*1945)

Millennials: $13.3 trillion (8.5%) (1981- 1996)

Generation Z: Insufficient data (1997-2010)

Generation Alpha: 100% Dependents, Pure Nesters (2010-2024)

So, the baby boomers have become  Gen Z's boogeyman for their travails and inadequacy at dealing with their place in society. Let's look at the baby boomers from the perspective of several angles.

They were born after the war (WWII). Their parents have seen the war, their fathers fought in it, their mothers worked at the factories in the absence of many men who were away on foreign lands they didn't know till then where and who it was they were fighting for. 

Of course, it was worse  in places from many parts of the world - from the plains and mountains of Europe to the oceans and jungles of Asia that made up the so-called theaters of war. It was in Asia I and my generation grew up in.

Demographers labeled it the population explosion, although in the west they’d coined the phrase “baby boom” to describe the decade and a half following 1945. There was a reason for the distinct labels, I soon learned, because a generation of baby boomers in post war North America had so much to live for, along a path of opportunities set up by their parents who became the first generation to pave the road to untold personal affluence and national wealth in a relatively short period of time for America and Canada, while Europe was still struggling to clear the rubble of war.  

On the other hand, in much of Asia, the newborns must first survive birth without prenatal care or benefit of sterile maternity wards in the harsh conditions of a war-torn environment where lack of medicine, doctors and nurses meant that health care was as primal as survival of the fittest.  Everyone was born at home, delivered by the local midwife. Surviving the first-year increased survivability significantly but growing up past that was like fish swimming upstream, against a current of poor nutrition, inadequate natal medicine, pediatric care and horrible sanitation. Countervailing those odds were the indomitable determination of the mother and the instinctual fervency of the child to survive.  I did not know about baby boomers until much later in life so the generation I grew up with was a collective story of survival as every child in a post war environment fought dearly to make it past the ages from seven to the pre-teen years.  

The succession of infants and toddlers that followed, year in and year out, made up the inevitable phenomenon of nature filling a vacuum. We had a population explosion; the west had a baby boom.  I and my family were fortunate later on to have immigrated to a country that is  America.

The baby boomers were likely the first to go to college in their families. Those who didn't went to work after high school.  The latter were the definition of what became the blue collar workers, after WWII. By late 60s and early 70s the boomers filled 75% of the workplace.

The boomers were also the first generation to have participated in the saving and investing spree brought on by 401K and other workplace enhanced savings programs (such as matching, or at least through company/employee jointly-participated contributions and stock ownership participation).   These programs, as a result, brought on not only an exponential growth in savings and investment participation by employees but also a dramatic increase in capitalization of businesses and industries.  The baby boomers were in no small measure responsible for the unprecedented economic boom in the U.S.

The baby boomers are the Generation W, superseding the XYZ generations, and should instead be the Wealthy generation that is not likely to be matched anytime in the foreseeable future.  How did they become that?

There was an earlier generation who were born between 1901 and 1927. "They were shaped by the Great Depression and were the primary generation composing the enlisted forces in World War II. Most people of the Greatest Generation are the parents of the Silent Generation and Baby Boomers.."  This was true not just in the U.S. but for those born in other parts of the world affected by the depression and the last great war - Europe, Canada,  Asia and Australia.

Soldiers came home to find work, start a family while young women became mothers forever reminded by the depression and still recovering from the ravages of war, indirectly or had lived it in their personal experiences. They were the parents of most of the boomers who grew up remembering the hardships their families went through.

By the early 60s, the boomers started to work after high school, followed by those who finished college by the late 60s. Many lived through credit financing to buy their first cars and settled in their first homes.  Those who made it unscathed by the financial burden were frugal and  savers even as the economy was growing to unprecedented heights.

By late 80s they were saving even more through 401Ks and other investment programs. At the turn of the century through the first decade, the boomers start retiring.  Money to travel, purchases of nicer vehicles took little dents into their savings, most of which were kept in investments while day-to-day expenses were taken off pensions (those who had them) and Social Security benefits and interests from investments.  Many went for their versions of their dream homes upon realizing they still had enough retirement years ahead of them (clearly more than the last generations had).

By 2010 and forward, all boomers have become empty nesters. But they kept their homes.  The very same homes the Gen Z are complaining about and clamoring for (though it's a mystery how they can afford them in today's market).  

So, why are the empty nesters not relinquishing their grip on their (now "empty") nests?

1. They are living longer, relatively feeling better about their health compared to their parents. They have access to modern medicine, medical care and health related technologies.

2.  Unlike the previous generation they can afford the upkeep of a big home when previously property taxes, energy and maintenance costs were real deterrents to keeping them.

3. They can afford to pay for house cleaning, yard work and even home delivered meals. They've upgraded their bathrooms with all the safety and convenient features and walk-in tubs that not only make soaking baths safe and convenient but come with the wonders of aroma, music, hydrotherapy and micro bubbles, temperature control at the touch of a button. 

4. Their mobility is unhindered even if they no longer drive due to ride share services like Uber and Lyft.  Some healthcare advantage services offer rides to and from for outpatient procedures (colonoscopy and the like) and there is a new service provided where health personnel will come to the house instead of a trip to urgent care facilities. Online stores are their shopping malls, so what is there to miss in going shopping.

5. Boomers are not giving up their hobbies at home, their knick-knacks, photo albums, and collectibles even if they are not worth much except for the priceless values of memories they held. At least they do not want to have them disposed of until they are gone; at which point they could care less.  Boomers don't go to movies anymore when movies come to them "streaming" that allow them unlimited trips to the bathroom or refrigerator without missing a scene or misunderstanding a dialogue, courtesy of close captions and the rewind button.

6. Retirement homes/communities are no longer the attractive denouement to those facing the sunset of their lives.  The Boomers believe that retirement homes have become rules-laden, even inconveniently restricting places for a generation of people who went by the rules all their lives.

7. Boomers, in short, will stay in their homes because they can and deservedly so. Most of all, they spent a good portion of their lifetime saving for it.

And just like that .. 1969 

was 

55 years ago

But who's counting?

😎