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Work Less, Spend Less: How Retiring Boomers may Impact the Economy

The economy has grown, in large part, because consumers are spending more money. It remains to be seen whether that trend will continue as more of the massive baby boomer generation approaches retirement.

Even before people retire, many tend to slow down their spending habits. Part of this is lifestyle driven; by age 50, most consumers have bought a home, furnished it, sent their kids off to college and are reining in their household budget.

The highest years for earning often come just before retirement but that’s also the time with the least amount of growth in income. According to studies conducted by the Federal Reserve Bank of New York, young adults see the fastest income increases. Those increases slow mid-career, and by the time we’re in our 50s, our hard-earned salaries could represent negative real wage growth.

Given little to negligible income increases during the latter stages of a career, it is more likely older workers are saving their money for retirement — not pouring it back into the economy. Recent research revealed that 80 percent of baby boomers are cutting back on how much money they spend. Among them:

  • 54% reduced discretionary expenses
  • 47% reduced recurring monthly expenses
  • 35% have created and maintain a household budget

The Congressional Budget Office reports that once the majority of baby boomers retire, government spending as a percentage of GDP will likely increase by another 9 percent due to the jump in entitlement benefits.

Not only will baby boomers likely be spending less as they age, many will continue to work. However, the mix of jobs available to older workers is changing as well. Over the past 26 years, 30 percent of manufacturing jobs have been eliminated, while service-oriented jobs in the education and health care fields have doubled.


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Danielle Christensen


Danielle is dedicated to serving clients to achieve their retirement goals. As a Paraplanner, Danielle helps the advisors with the administrative side of preparing and documenting meetings. She is a graduate of the College of St. Benedict, with a degree in Business Administration and began working with Secured Retirement in May of 2023.

Danielle is a lifelong Minnesotan and currently resides in Farmington with her boyfriend and their senior rescue pittie/American Bulldog mix, Tukka.  In her free time, Danielle enjoys attending concerts and traveling. She is also an avid fan of the Minnesota Wild and loves to be at as many games as possible during the season!