They’re Old, They’re Rich and, Too Bad for the Economy, They’re Kind of Tight – Bloomberg 11-12-14

Salient to Investors:

William Emmons at FRB St. Louis said:

  • Americans born between 1928 and 1945 have become the richest old generation ever by benefiting from improved health, a more generous social safety net, an exit from the job market ahead of the past recession, rebounding stock and home values, and a diversified approach to investing.
  • The hit to net worth for the two subsequent generations will be difficult to recoup before they leave the workforce.
  • New retirees may release pent-up demand for travel and restaurant meals, but that behavior usually does not last for most people.

Neil Howe at Saeculum Research said the Silents have done very well, mostly from just being in their location in history – they planned ahead, were risk averse, played by the rules and the system worked for them.

Prime-age workers typically spend more than their elders.

Compared to other age groups, the median net worth for the oldest Americans has climbed to near the top from near the bottom just 20 years ago.  The median family net worth, adjusted for inflation, of Americans 75 and older was $194,800 in 2013 versus $130,900 in 1989.

JPMorgan Chase found that household spending peaks at age 45 and then falls in every category except health care, dropping about 43 percent by the age of 75.

Pew Research Center said 34% of the Silent Generation self-identifies as Democrats, 32% as independents and 29% as Republicans.

From 1962 through 1991, GDP grew an annual average of 3.5%, but 2.6% since.

The SP 500 Index rose almost 14 times from the start of 1977 through the end of December 2007. The HFA home price gauge rose 472% since 1975.

The Urban Institute said federal outlays on programs benefiting those 65 and older rose to $27,975 in 2011 per capita adjusted for inflation from $4,000 in 1960, or 7.5% of GDP from 2.1%.

In 2013, 9.5% of Americans aged 65 and older were in poverty, the lowest of any age group. In 1959, 35% of Americans aged 65 and older were in poverty, the highest of any age group.

In 2009, a 65-year-old could expect to live another 19.2 years, versus 12.2 years in 1930.

Read the full article at http://www.bloomberg.com/news/print/2014-11-12/silent-generation-wins-life-lottery-as-richest-u-s-age-group.html

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