Richest Generation In History: Silent

| November 16, 2014 | 0 Comments | Email This Post Email This Post
Two happy people of the silent generation the richest in histor

Two happy people of the silent generation the richest in history

When he and his wife married in 1959, they lived in Texas and saved 10 percent of every paycheck. Thanks to well-timed equity and property investments, the 81-year-old now lives a much different life than the elderly he knew as a child.

“We just invested the money very wisely, some in markets and some in real estate, and as a result we built up a nice little nest egg by the time we were ready to retire,” said Burkhart, who lives at the Arbor Acres retirement community in Winston-Salem, North Carolina.

The median net worth for the oldest Americans has climbed to near the top compared with other age groups from near the bottom just two decades ago, based on the Federal Reserve’s Survey of Consumer Finances. This shift in buying power may not be a positive development for the economy as prime-age workers typically spend more than their elders.

The Silent Generation, born between 1928 and 1945, has benefited from improved health, a more generous social safety net, an exit from the job market ahead of the past recession and rebounding stock and home values. Combined with a diversified approach to investing, that’s made them “the richest old generation we’ve ever seen,” said William Emmons, a senior economic adviser at the Federal Reserve Bank of St. Louis. “They are in the sweet spot.”

Median Income

The median family net worth of Americans 75 and older was $194,800 last year adjusted for inflation, compared with $130,900 in 1989, the Fed data show. Members of the Silent Generation are currently about ages 69 to 86.

With the youngest of the group eligible to start retirement in 2007, they had some protection against the largest financial downturn in the post-World War II era. The title of richest ever will probably go unchallenged for now as the hit to net worth for the two subsequent generations — late-wave baby boomers and much of Generation X — will be difficult to recoup before those groups begin to leave the workforce, Emmons said.

Impact on Economy

“The overall wealth numbers are going up, but they’re not necessarily translating into spending,” Emmons said. “That’s one of those implications of this aging population that we need to think more about.

The term Silent Generation was coined by Time Magazine in a 1951 article as the group was coming of age. It described the generation as “working fairly hard and saying almost nothing,” one that “does not issue manifestos, make speeches or carry posters.”

Some 34 percent of the Silent Generation self-identifies as Democrats, 32 percent as independents and 29 percent as Republicans, according to the Pew Research Center in Washington. Still, older Americans were critical to the GOP’s success in midterm elections this month. About 22 percent of the electorate was 65 and older, and Republican candidates won their vote by a 16-point margin, Pew data show.

The generation came of age at a time when the U.S. and global economies were picking up.

Timing Fortuitous

Burkhart’s timing in the real estate and stock markets was particularly, and admittedly, fortuitous. After a 30-year career producing and directing live television, he and his late wife Elizabeth, moved to Maui, Hawaii, where they had bought property in the 1980s.

They sold the house for a 300 percent profit around 2008 and invested the money in mutual funds as the S&P 500 Index was approaching an almost 13-year low, he said. “It was the most fortunate timing you could imagine,” Burkhart said. “There’s no way you can plan on that.”

Federal outlays on programs benefiting those 65 and older also became more generous over the decades. They rose to $27,975 in 2011 per capita adjusted for inflation from about $4,000 in 1960, according to a report this year from the Urban Institute. As a share of GDP, those expenditures climbed to 7.5 percent from 2.1 percent over that time frame.

Consequently, 9.5 percent of Americans 65 and older were in poverty in 2013, lower than any other age group, according to the U.S. Census Bureau. That compares with 35 percent in 1959, when they had the highest poverty rate.

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