Posts Tagged "greatest generation"
June 21, 2022
Early Life Traumas Lead to Early Retirement
Mental illness, obesity, smoking, chronic disease – researchers have been able to connect the dots between an array of stresses early in life and how people will fare as they age.
New research zeroes in on the adversities experienced by children and young adults that ultimately contribute to a premature retirement due to a disability.
The basic finding is not terribly surprising – that life’s financial and social circumstances can lead to disabling conditions that will either nudge, or force, older workers to leave the labor force early.
More remarkable is the exhaustive list of past experiences that can increase that risk.
For example, childhood financial adversity in this study took many forms – an unemployed father, family relocations for financial reasons, or even having few books in the house. People whose families struggled financially when they were children were the most likely to retire prematurely.
The study was based on surveys asking older working people born during the Baby Boom, the Depression, and World War II about stressful or traumatic events experienced in childhood and middle age. The researchers followed them through several years of surveys to determine who retired before turning 62. The early retirees were asked whether a medical condition or chronic disability was either an important reason for leaving the labor force or prevented them from continuing to work altogether.
Added to the childhood traumas are a range of social adversities faced by young and middle-aged adults – the death of a spouse, natural disasters, combat duty, divorce, violence, or having a child addicted to drugs – that also increased the likelihood of early retirements. …Learn More
January 14, 2021
Boomers Repairing their Mortgage Finances
The housing market collapse more than a decade ago inflicted a lot of financial damage on baby boomers nearing retirement. But a new study finds that some have been trying to make up for lost time by rapidly reducing their mortgage debt.
Since the Great Recession, the boomers who were born in the 1950s – they are now in their 60s – have paid down more than 40 percent of their remaining mortgages and home equity loans, on average – a much faster pace than their parents did at that age.
Not all the damage from the Great Recession can be repaired, however, because many people lost their homes in the wave of foreclosures. For example, the homeownership rate for the boomers born in the early 1950s quickly dropped slightly more than 10 percentage points after the housing crisis, to 67 percent, where it remained until 2016, the last year of data in the study.
Since then, the U.S. homeownership rate has increased but is still below the pre-recession peak.
The impact of the housing crisis was far less dramatic for Americans born in the early 1930s. Their homeownership rate dipped 2 percentage points right after the crisis, to a relatively high 76 percent, according to Jason Fichtner of Johns Hopkins University.
The decline in boomers’ homeownership leaves fewer of them with housing wealth to fall back on when they retire.
They have also fallen behind in fully paying off their mortgages, which would eliminate their monthly payments and make the house a low-cost place to live. Just half of the boomers born in the early 1950s who held onto their homes during the Great Recession own them outright – two-thirds of the people born in the early 1930s had paid off their mortgages by that age. …Learn More
March 3, 2020
Pre-Retirement Debt is Rising Over Time
Baby boomers have a lot more debt than their parents did.
By all accounts, the parents were in pretty good shape for retirement because they held their debt levels down to a mere 4 percent of their total assets in the years immediately before retiring – ages 56 to 61 – according to a new study.
At those same ages, the typical baby boomers’ debt has ranged from 19 percent to 23 percent of their assets, thanks in large part to the 2008 drop in stock portfolios and in the housing market.
Generational trends in debt levels are difficult to analyze, and the issue is far from settled among researchers. This study notes, for example, that the situation might not be as grim as the rising debt indicates.
The broad numbers hide the positive step boomers have taken – just as earlier generations did – to reduce their debt as they moved through their 50s. And although the younger boomers have fewer assets than older boomers had at that stage of life, the younger boomers are also working to improve their finances by paying down their mortgages at an accelerated pace.
But the analysis also uncovered another troubling trend for the baby boomers born in the middle of the demographic wave: about 10 percent of them had more debt during their late 50s than their assets were worth. When their parents were that age, some of the most indebted of them still had more assets than debts.
In his study, Jason Fichtner of Johns Hopkins University compared debt-to-asset ratios for five different age groups, starting with the boomers’ parents, who were born during the Great Depression, and running through the people who were born toward the tail end of the baby boom. The chart above is a financial snapshot of rising debt-to-asset ratios for each group when they were between ages 56 and 61. …Learn More