Baby Boomers Are Still Boosting the Economy

By: Anneken Tappe · October 16, 2023 · Reading Time: 2 minutes

Senior Spending Surge

Economists have been somewhat surprised by the strength of American consumer spending in the face of high inflation, and interest rates. There are multiple reasons behind the phenomenon, but baby boomers likely played a role as well.

Indeed, government data shows seniors have been spending more than ever over the past few years.

Driving Consumer Spending

People 65 or older made up nearly 18% of the population as of August, the largest percentage since the Census Bureau started collecting data back in 1920. But that group accounted for 22% of spending last year, the highest level since 1972.

There are a few factors at play. For example baby boomers were likely to have paid off home loans already, or else locked in a low mortgage rate, and have less debt overall.

On top of that, retirement investment in the stock market would have appreciated during the stock market rally that followed the initial shock of the pandemic, also relieving the strain on personal finances. That said, this generalization doesn’t catch every experience of baby boomers, and nobody is immune to price hikes either. But compared to younger generations, baby boomers fared better.

Buoying the Economy

Overall, Baby Boomers have amassed a remarkable $77 trillion in wealth. In the short-term, this safety net could continue to help fuel consumer spending and protect the U.S. economy from sinking into a recession.

Read more reporting here.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

TLS 1.2 Encrypted
Equal Housing Lender