Baby Boomers’ percentage of spending appears to be waning, with the JPMorgan Chase Institute finding that growth of everyday spending fell 7.6 percent over the last two years for Americans aged 65 and older. What’s more, day-to-day spending by people 65 and older declined 4.4 percent between April 2014 and April 2015. It declined another 4.4 percent from April 2015 to April 2016.
Looking at 16 billion transactions from more than 54 million Chase customers over the two-year period, the JPMorgan Chase Institute also found consumers in the West and in the South curtailed spending the most among seniors. “People are coming to this retirement age,” said Diana Farrell, CEO of the JPMorgan Chase Institute, in a report, “and they have reason to have some concern.”
For now, millennials are making up the slack from a slowdown in spending on the part of seniors, but if this trend continues, it may be a blow to the economy, since the report noted that Boomers make up 18 percent of overall consumer spending in the country. Millennials have their own problems, such as student loan debt.
While many people have amassed a nest egg for retirement, just as many haven’t, which is one of the reasons Boomers who are now entering retirement are pulling back on spending. According to a recent Insured Retirement Institute report looking at Baby Boomers, around 59 percent expect Social Security to be a major income source during their golden years, up from 43 percent in a 2014 survey. The Insured Retirement Institute also found in a recent survey that only 55 percent of respondents had retirement savings in 2016, which means 45 percent of Baby Boomers have zero saved for what will be their most costly purchase: retirement. Back in 2014, 80 percent of survey respondents said they had money saved for retirement.