They came into the world in big numbers -- and proceeded to earn big numbers. As the wealthiest generation, their ages span two decades.
And they have two pecuniary paradigms. One the one hand: Gordon Gecko, the hero of the movie Wall Street, who proclaimed that, “Greed, for lack of better word, is good.” And, on the other, Dudley Moore’s leading role in Arthur -- the professional heir. Experts now say, baby boomers who follow the former model will find themselves far better off today.
“I think boomers have very high expectations of what they will inherit and perhaps unrealistic expectations,” said Daniel Fitzpatrick, CEO of Citigroup Trust.
Why? For starters, there are more of them because they come from bigger families; on average, boomers parents had one more child per family than the generation before.
“There's just a lot more boomer kids out there, and that's cutting up the pie into very small pieces,” said Mark Zandi, chief economist at Economy.com.
And, thanks to improved pharmaceuticals, boomer parents are living longer.
“There's a great deal of concern in that generation about the possibility of outliving their wealth,” said Fitzpatrick.
That means boomers are more likely to be supporting their parents than the other way around.
In 2004, median inheritances were about $29,000. But 30 years ago they were $10,000 more.
“It's basically a drop in the bucket compared to what they might need,” said Michael Hurd, Director of the RAND Corporation’s Center for the Study of Aging.
Overall, inheritances have grown to nearly $200 billion a year -- three times the pool in the 1970s, accounting for inflation. But it's concentrated at the top: only 7 percent of the estates account for half of that total.
And while baby boomer parents with memories of the Great Depression are, as a rule, good savers, their greatest expense is rising every day.
“There is no limit to the rate of inflation in health care costs relative to the cost of other things,” said Hurd.
And consider the way baby boomer parents saved. Like boomers, they were homeowners in droves, which became their chief asset. But most of the generation that preceded boomers rely on corporate pensions – instead of boomer-era 401(k)s. And unlike retirement stock funds, pensions cannot be bequeathed. That could leave some boomers without a net.
“It means that they're going to be under a lot of financial pressure in the years ahead,” said Zandi. “And that's going to put pressure on the entire economy and on the political process.”