Panting For Boomers' Big Bucks

Shilling For Boomer Bucks

Graying baby boomers have a lot more green in their wallets than their parents ever did at middle age. And the generation that once snapped up Beatles records and Hula-Hoops is splurging on luxury condos and exotic getaways.

As boomers enter a time in their lives when people are more apt to spend money, businesses and advertising firms are beginning to see the generation as lucrative consumers with lots of buying power, said Beth Barnes, advertising professor at Syracuse University.

In Lorain, Ohio, for instance, city officials planned a waterfront development project aimed at getting “downsizing” boomers whose grown children have just left home into luxury townhomes about 45 minutes from Cleveland.

"What's happening is as children grow and leave the house, people don't need the bigger house, bigger yard, and are looking for something certainly smaller but that's nice," said lifelong Lorain resident George Koury, 50. He said he is thinking about trading his four-bedroom house for a smaller residence after the last of his three children leaves home next year.

Today, there are about 78 million baby boomers, typically defined as those people born between 1946 and 1964. The oldest boomers will be 54 this year.

Some analysts had predicted that boomers would not be as successful as their parents were, simply because there were so many of them competing for what was then thought to be a scarcity of jobs, said Lisa Keister, a sociology professor at Ohio State.

But even concerns about the resiliency of Social Security are not enough to overlook the current success of boomers, Keister said.

The median family income for a household headed by someone between 45 and 54 has risen from $3,440 in 1947 to $61,833 in 1998, according to the Census Bureau. Accounting for inflation, the 1947 figure equates to $23,170 in 1998 dollars, Census officials estimate.

Citing today's robust economy, good salaries and pension plans, Keister said "Social Security won't be a major concern for boomers on average. If they don't have Social Security (when they retire), it's probably not going to matter much."

She also said boomers are more likely than their parents to have more wealth than income, meaning they have more than a year's worth of salary in savings. That also holds true for liquid financial assets and home equity, but boomers also have fewer other financial assets and more debt.

"We see a real contrast between people in the first half of productive life investing and running up debts" to get their kids through school, "and in the second half, reaping and harvesting the benefits," demographer Martha Farnsworth Riche said.

Boomers are becoming more attractive to marketers now in part because many are shedding the financial burdens of paying their children's college costs, said Ken Dycthwald, founder of Age Wave IMPACT, an Emeryville, Clif.-based marketing company that focuses on older Americans.

"It's people over the age of 40 that have the money," he added. "The 1990s were incredibly prosperous time for these adults. They are becoming the power consumer in this millennium."

John Rother, 53, legislative director of the American Association of Retired Persons, is about to send the last of his two children to college. "Every parent will have mixed feelings. There's a certain measure of freedom which comes with (children's departures)," he said.

"We'll probably have a long vacation, and have more friends over for dinner, but that's it," Rother said.

Only now is the advertising industry, which is dominated by people in their 20s and 30s, trying to target older generations en masse for things beside luxury cars, said Barnes, the Syracuse advertising professor. And she says it will take Madison Avenue awhile to change.

"When you talk about messages that appeal to older groups ... it's a problem that agencies are trying to address," she said.

Not all boomers will benefit from the good economic times. Even after their kids leave home, some boomers are now taking care of their elderly parents.

Income distribution also is not evenly distributed, and great disparities exist between the poorest and richest baby boomers. Many boomers delayed child-rearing until their late 20s and early 30s and are only now saving up for their children's college tuition.

After getting divorced nine years ago, and with her children out of the house, Linda Cheney of Bryantown, Md., needed something to fill up her newfound time and shore up her financial situation. She went back to school and after eight years, graduated with a bachelor's degree in information services technology from the College of Southern Maryland.

"I'm 50, a baby boomer, and I look proudly back on that time when I grew up," she said. "But this is a totally different situation to where I expected I'd be at this point in my life."

By Genaro C. Armas