According to data provided by the Pew Research Center, the Baby Boomer generation is the largest demographic cohort in modern American history. Who is considered a baby boomer? Anyone born between 1946 and 1964 is a member of the Baby Boomer generation. Seventy-six million Americans were born during this time period. As a group, baby boomers were wealthier, more active and more physically fit than any other preceding generation. Additionally, they were the first generation to be exposed to major advances in technological innovations. This would include such things as personal computers, cell phones, electronic mail, World Wide Web and the digitization of commerce. This probably explains why baby boomers were the first demographic cohort to fully adopt “consumerism,” which encourages the acquisition of goods and services in ever-increasing amounts.          


In terms of financial stability, baby boomers have more investable assets than any other demographic group. Based on data provided by the Federal Reserve, the average baby boomer net worth was $1.21 million in 2019. Two decades earlier in 1998, baby boomers enjoyed a net worth of $747,600. This represents a net worth increase of 61.8% during the 21-year period. For the sake of comparison, the Baby Boomer generation is in much better financial condition compared to Generation X, which represents the demographic population immediately following the baby boomers. According to the same data taken from the Federal Reserve, the Generation X population has an average net worth of $509,100 in 2019. Baby boomers have considerably more wealth than the Generation X demographic. In fact, the average baby boomer has 135.7% more wealth than the average Gen Xer. Of course, we should expect baby boomers to be in better financial shape because they’ve had more time to save.  


How Are Baby Boomers Preparing For Retirement?

Despite what many financial pundits have forecasted during the past decade, the average baby boomer is in excellent financial condition. As we mentioned, the net worth of the average baby boomer is $1.21 million. How did the Baby Boomer generation manage to acquire such a sizeable retirement nest egg? The best way to answer this question is to examine the investment profile of a typical baby boomer. Please examine the following table.


Stock Market Investors By Age Category


  • 18 to 29 – 31% 
  • 30 to 49 – 62% 
  • 50 to 64 – 62% 
  • 65+        – 54% 


The current age of the Baby Boomer generation is 55 to 73. As you can see from the table, 58% of investors in the baby boomer age group are stock market investors. Approximately 6 out of every 10 baby boomers participate in the stock market. These figures were taken from a 2017 Gallup survey. This explains why baby boomers are financially prepared for retirement. Another reason why baby boomers are in good financial shape is because the stock market has performed exceptionally well during the past 20 years. Please review the following table.


S&P 500 Performance Results

  • 1999 19.53%
  • 2000 10.14% (-)
  • 2001 13.04% (-)
  • 2002 23.37% (-)
  • 2003 26.38%
  • 2004 8.99%
  • 2005 3.00%
  • 2006 13.62%
  • 2007 3.53%
  • 2008 38.49% (-)
  • 2009 23.45%
  • 2010 12.78%
  • 2011 0.00%
  • 2012 13.41%
  • 2013 29.60%
  • 2014 11.39%
  • 2015 0.73% (-)    
  • 2016 9.54%
  • 2017 19.42%
  • 2018 6.24% (-)
  • 2019 28.88%

As you can see from the table, the stock market has performed incredibly well during the past two decades. The S&P 500 generated only five losing years. Therefore, 76% of the years have been profitable over the course of the past 21 years.   



Baby boomers were the first generation to grow up with the stock market as a “mainstream” investment. Throughout the 1950s and 1960s, very few Americans invested in the stock market. In 1952, the New York Stock Exchange (NYSE) conducted a nationwide survey in an effort to determine the number of Americans that invested in the stock market. The NYSE discovered that only 4.2% of the adult American population invested in the stock market.  


Thanks to aggressive changes in Wall Street regulations, investing in the stock market became much easier throughout the 1970s. Volume on the NYSE began to increase dramatically in 1974, as American workers were encouraged to save for retirement when Congress introduced Individual Retirement Accounts (IRA) through the passage of the ERISA Act in 1974. Additionally, investing in mutual funds became quite common with American families as Vanguard launched its business in May 1975. 


By 1990, more than 20% of the American population was investing in the stock market, with baby boomers leading the way. During the past three decades, boomers have continued to systematically add money to the stock market through 401(k) plans, IRAs, pension plans, college savings plans and taxable investment accounts. The Baby Boomer generation also had the benefit of participating in one of the greatest stock market advances in the history of Wall Street with the internet mania and dotcom explosion of the 1990s. 


Officially, baby boomers began to retire in 2011. Currently, 10,000 boomers per day are retiring from the workforce. This rate of retirement will continue for the next nine years. The last group of boomers will retire in 2029. What can we learn from this generation of investors? Why are baby boomers outperforming all other demographic groups in terms of saving for retirement? As we discussed, baby boomers are aggressive investors in the stock market. Additionally, based on a 2017 survey conducted by Spectrem Group, 38% of all boomers use financial advisors to help develop a long-term investment strategy. This explains why the Baby Boomer generation is adequately prepared for a comfortable retirement.


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