Baby Boomer: Definition, Age Range, Characteristics, and Impact

What Is a Baby Boomer?

“Baby boomer” is a term used to describe a person born in the years 1946 to 1964. The baby boomer generation makes up a substantial portion of the world’s population, especially in developed nations.

As the largest generational group in U.S. history (until the millennial generation slightly surpassed them), baby boomers have had—and continue to have—a significant impact on the economy.

Baby Boomer Facts and Figures

The generation of baby boomers emerged after the end of World War II, when birth rates around the world spiked. The explosion of new infants became known as the baby boom. During the boom, 76 million babies were born in the United States alone.

While several million baby boomers have died in the decades since, immigration to the U.S. has helped replenish the supply. As of late 2019, U.S. Census Bureau estimates put the baby boom population at 71.6 million.

Most historians say the baby boomer phenomenon most likely involved a combination of factors: people wanting to start the families that they put off during World War II and the Great Depression before it, and a sense of confidence that the coming era would be peaceful and prosperous. Indeed, the late 1940s and 1950s generally saw increases in wages, thriving businesses, and an increase in the variety and quantity of products for consumers.

Accompanying this new economic prosperity was a migration of young families from the cities to the suburbs. The G.I. Bill allowed many returning veterans (though not Blacks) to buy affordable homes in tracts around the edges of cities. This led to a suburban ethos of the ideal family consisting of the husband as the provider, the wife as a stay-at-home housekeeper, plus their children.

As suburban families began to use new forms of credit to purchase consumer goods such as cars, home appliances, and television sets, businesses also targeted their children, the growing boomers, with their advertising and marketing efforts. As the boomers approached adolescence, many became dissatisfied with this ethos and the consumer culture associated with it, which fueled the youth counterculture movement of the 1960s.

As the longest-living generation in history so far, boomers are at the forefront of what has been called a longevity economy. According to a 2021 report from The Brookings Institution, baby boomers spent about $8.7 trillion in 2020 on goods and services—a figure that’s expected to increase to $15 trillion by 2030.

What Baby Boomer Retirement Is Looking Like

The first members of the baby boom generation reached the traditional retirement age of 65 in 2011. By 2029, every baby boomer will be 65 or older.

In many ways, their retirement experience will be very different from that of their parents, members of the so-called Greatest Generation. These are some of the key differences:

Likelihood of Longer Retirement

Increasing life expectancy has made it likely that baby boomers will spend more time in retirement than their parents did. The average life expectancy for a 65-year-old American today is 18.3 years, 16.9 years for men and 19.6 years for women. In other words, a 65-year-old man today can reasonably expect to live to age 82 and a 65-year-old woman to age 85. And many Americans, as we’re seeing, now live into their 90s or even 100s.

Greater longevity, coupled with good health and an accommodating job market, also opens up the possibility for baby boomers to remain in the workforce longer. Doing so will not only provide them with more current income and more time to plump up their retirement accounts but also will reduce the period of time that their savings will need to support them.

Decline of Traditional Pensions

During their working years, baby boomers witnessed the decline of traditional defined-benefit pensions, where the employer promises workers a certain amount of regular income upon retirement. The employer was responsible for funding the pension plan, as well as choosing and managing its investments. Many of the baby boomers’ parents had retired comfortably on such pensions.

In their place came defined-contribution plans, such as 401(k) plans, largely funded by the employees themselves out of each paycheck, often with some form of matching contribution from the employer. Employees were given a choice of investments, such as an assortment of mutual funds, making it their responsibility to contribute enough money and invest it wisely—and it was their tough luck if they failed to do so.

In 1975, 27.2 million private-sector workers participated in defined-benefit pension plans. By 2019, that number had dropped to 12.6 million. Meanwhile, the number of defined-contribution plan participants rose from 11.2 million to 85.5 million over that same period.

The result has not been pretty for a large part of the baby boomer population. As of 2020, only 58.1% of baby boomers ages 56 to 64 had any type of retirement account.

Among baby boomer households with retirement savings, the Transamerica Center for Retirement Studies estimates their median value at $289,000. The center also reports that 41% of boomers expect their primary source of retirement income will be Social Security benefits. That brings us to another important difference.

Concern Over Viability of Social Security

The money to pay Social Security retirement benefits comes from two sources: a Social Security trust fund (known as the Old-Age and Survivors Insurance, or OASI, trust fund) and out of the income that’s being paid into the system by current workers.

The latest estimates from Social Security’s trustees are that the trust fund will run out of money in 2033, at which point the income from current workers will be able to cover only 77% of current retirement benefits.

Part of the problem is the size of the baby boom retiree cohort vs. the number of current workers. In 1955, for example, there were 8.6 active workers for every retiree. By 2022, that number had dropped to 2.8 workers per retiree, according to Social Security Administration estimates, and by 2035, it may be down to 2.3.

So, obviously, something has to give—with higher worker contributions, lower retiree benefits, and/or an increase in the retirement age being among the possibilities. Fortunately for baby boomers, Social Security has long been considered the “third rail” of American politics, and any politicians who vote to reduce benefits on current or near-term retirees will do so at considerable risk to their careers.

The Bottom Line

The generation of baby boomers, now moving into retirement, remains a powerful force in the U.S. economy and will most likely continue to be one for years to come.