| The Baby Boom generation, the nearly 80 million of | | | | primarily impacted older Americans, whose retirement |
| us who were born between 1946 and 1964, is the | | | | accounts lost $2.8 trillion, or nearly one-third of their |
| largest in U. S. history. Its size alone guaranteed that | | | | value. ( |
| Boomers would be our most influential generation, | | | | Equally devastating is a recent report by the Center |
| and indeed their impact on the country’s social, | | | | for Economic and Policy Research ( which concludes |
| cultural and economic institutions is unprecedented. A | | | | that the collapse of the housing bubble has |
| "pig moving through a python," as the Baby Boom | | | | decimated the holdings of the vast majority of near |
| generation has been aptly, if somewhat unpleasantly | | | | retirees, who will have little or no housing wealth this |
| characterized, is responsible for the youth | | | | year and will be almost totally reliant on Social |
| movements of the sixties, including those advocating | | | | Security and Medicare to support them after |
| civil rights and feminist issues, as well as antiwar | | | | retirement. |
| protests. As they entered their twenties, recoiling | | | | Boom Bust and Senior Housing. It has long been |
| against the excesses of the Nixon presidency and | | | | assumed that Boomers’ post-retirement housing |
| the Vietnam War, Boomers adopted a culture of | | | | would mirror the opulence that has typified their |
| excess, coining the phrase "Don’t trust anyone | | | | existence, high-quality, amenity-rich living with |
| over 30," deeply critical of their parents’ | | | | enhanced amenity packages, including a library, movie |
| conservative values, especially those involving | | | | theater, lounge and billiard room, beauty salon and |
| spending and saving. | | | | barber shop, chapel, heated swimming pool and hot |
| Boom Times. Boomers have spent wildly and lavishly | | | | tub, bistro, formal dining room and activities rooms. |
| on themselves, certain that the economic prosperity | | | | Independent living communities will be expected to |
| that followed World War II would continue | | | | offer a range of technological amenities to meet the |
| indefinitely. They turned into the "Me" generation, its | | | | expectations of this tech-savvy generation, including |
| purpose, "Shop ‘till you drop," its goal, "He who | | | | building-wide wireless Internet access, computer labs |
| dies with the most toys wins." In a direct rebuke to | | | | outfitted with software intended to challenge and |
| their parents, Boomers spent rather than saved, | | | | stimulate residents' minds, and Internet cafes and |
| driven by wants rather than needs. When the first | | | | bistros where they can take their laptops and |
| wave of them decided to buy cars, the auto industry | | | | socialize with others while surfing the Web. |
| instantly responded, gearing up to produce new cars | | | | Some senior housing developers and marketers are |
| at twice the rate of growth of the American | | | | beginning to pay close attention to the impact of the |
| population. | | | | current economic downslide, which has drained many |
| Similarly, the housing supply was insufficient to meet | | | | Boomers' savings and devastated the value of their |
| Boomers' needs, and the unprecedented demand for | | | | housing. The fact is that the collision between |
| the limited supply of homes ratcheted up housing | | | | economic reality and the expectations of Baby |
| prices, which eventually produced the "McMansion" | | | | Boomers about the quality of their post-retirement |
| phenomenon. These are 3,000- to 5,000-square foot | | | | housing will dumbfound this, the "entitlement" |
| homes especially designed for Boomer couples | | | | generation. Expecting McMansions, nearly destitute |
| wanting luxurious spaces that would confirm their | | | | Boomers will likely encounter retirement housing on a |
| opulent lifestyles. Indeed, the McMansion reflects an | | | | par with their first apartments. |
| especially powerful Baby Boomer trait: success | | | | And what about Boomers who at some point will |
| deserves to be visible. Trophies and lifestyle choices | | | | need long-term health care? Those who are relying |
| are the best evidence of a lifetime of achievement. | | | | on Medicare to cover its costs will be equally |
| Now in early- and mid-middle age, between 45 and | | | | dumbfounded: Medicare doesn't pay for long-term |
| 63 years old, the Baby Boom generation was, until | | | | health care. Boomers themselves will be writing the |
| very recently, wealthier than any other age group, | | | | check for the $2,500-$3,500/month cost (in current |
| controlling 70 percent of the total net worth of | | | | dollars) of assisted living, the $4,800/month cost of |
| American households--$7 trillion--owning four-fifths of | | | | nursing homes--or the $8,000/month cost of |
| all money in financial institutions, and accounting for | | | | round-the-clock in-home health care. Only when |
| nearly one-half of total consumer demand. | | | | Boomers' personal assets are gone will a government |
| Boom Bust. Unlike their predecessors, whose | | | | agency, Medicaid, get involved. Medicaid's the one |
| accumulated savings funded their retirement, Baby | | | | that helps the poor and disabled, which means that |
| Boomers have counted on their assets to deliver | | | | the costs of care for the overwhelming majority of |
| needed wealth. The spectacular performance of the | | | | Baby Boomers will be paid from state or federal |
| stock market and the recent astounding appreciation | | | | funds. Medicaid, the program that was established to |
| of housing values produced the results that are | | | | pay for the healthcare needs of the poor and |
| summarized above. | | | | disabled, will rapidly be transformed into the long-term |
| However, the stock market lost 47 percent of its | | | | care insurance program for America’s Baby |
| value between September 30, 2007, and December | | | | Boom generation. |
| 2, 2008, a decline of about $11 trillion. This has | | | | |