I knew too much Viagra, Cialis, and SUVs would lead to no good.
WSJ: When Boomers ran out of cash, they financed their dreams. The U.S. household saving rate plunged to 2% of income in the 2000-2005 period, when Boomers were hitting their earning peak, from 10% during the early 1980s. Imposing McMansions sheltered occupants with five-figure credit-card balances, exotic balloon mortgages and V-8 powered sport-utility vehicles financed over five and six years, all adjuncts to a lifestyle that depended on cheap credit and cheap oil.
Now, millions of Boomers are realising that “hope I die before I get old” was just a sarcastic line in a rock and roll song, not a life plan.
Baby Boomers are rounding into the final laps of their careers largely untested and unprepared for what could be the worst economic crisis in their lifetimes. The sluggish 1970s and early 1980s overshadowed the college years and early work lives of the bulk of the Boom generation. But with a few mild hiccups, it’s been easy riding since then.
Until now. Some economists and demographers say the Baby Boomers themselves are driving the current turmoil. As Boomers send their kids out into the world, they are entering the phase of life when income starts to fall, spending slows and houses get sold. The same generational heft that Boomers used to create fads for hula hoops, sport-utility vehicles and Harleys will now work against them as all of them rush to cash out and slow down at once. That puts more houses up for sale to far fewer buyers: a younger generation that is also less able to afford them.
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