The Impact of Thrifty Baby Boomers on the Global Economy
Economy

Baby Boomers: Defying Stereotypes, Elderly Wealthy Retirees Save More Than They Spend

Despite being considered the wealthiest generation in history, baby-boomers in the West are not spending their money as one would expect. Instead of splurging, the elderly are saving their money for a variety of reasons. They are concerned about the increasing length of their retirements, the potential need to pay for old-age care, the uncertainty of how long they will live, and the desire to leave assets for their children.

Since 2015, Americans aged between 65 and 74 have been saving more money than they are spending. This pattern is also evident in other wealthy countries, from Canada to Japan. Despite the stereotype of wealthy retirees enjoying luxury cruises and expensive wine, the reality is that they are being unusually frugal.

This trend is significant because retirees hold a substantial amount of wealth and their financial decisions have a significant impact on capital markets. In the United States, baby boomers alone have a combined net worth of $76 trillion, or over $1 million per person. Their saving habits have influenced interest rates for years and economists expected that as boomers retired, they would start spending more, potentially causing a reversal in the trend of declining interest rates.

However, data shows that many retirees are continuing to save rather than spend

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