Thanks to decades of rising home prices and a historically impressive bull market, Baby Boomers possess more than half of American household wealth. That’s more than double the amount of wealth controlled by Generation X, and five times as much as that controlled by Millennials and younger generations.
If you are the child or grandchild of a Baby Boomer, you might think this is good news: as long as you exhibit the appropriate filial piety towards your gracious elders, you’ll be the recipient of their largesse. Indeed, some academics estimate that in the next 20 years there will be an incredible wealth transfer of money and assets amounting to between $68 trillion and $84 trillion.
But not so fast. Those estimates probably don’t sufficiently consider the dramatically expanded costs of growing old, which may very well evaporate that anticipated inheritance. Those who treasure family — and passing traditions to the next generation — should take note.
According to data from the federally funded, decades-long Health and Retirement Study analyzed by The Washington Post, the median American spent almost $20,000 out of pocket on various types of care in the final decade of her life. Almost 20 percent of those persons spent more than $50,000, and about five percent of them spent more than $100,000.
Between 2006 and 2022, the share of Americans whose elder care expenses emptied their savings increased from six percent to almost 11 percent. Even scarier is that these figures probably underestimate the costs, because they don’t fully account for assisted-living facilities, which on average annually cost about $75,000.
According to a study from earlier this year: “Most Americans — many more than may appreciate it — will have little left to pass onto future generations after depleting assets to pay for long-term care costs.” This is compounded by the fact that Americans’ lifespans are lengthening and an increasing number of retired Americans (now approximately 25 percent) do not live within 30 miles of one of their children, and thus are more likely to outsource care. Because of the sheer size of the Baby Boomer population and the shortage of paid caregivers, the price of senior living facilities has skyrocketed, the median rate almost doubling in five years.
This is bad, and not just because it means younger generations may see little, if any, of the money their parents and grandparents saved. Most of that wealth is instead going to the health- and elder-care industries.
It also means there is less cross-generational involvement in American families: grandparents and parents are increasingly disconnected from the lives of those who would benefit from their knowledge, experience, and assistance, and grandchildren and children are less available to help their elders navigate aging. The result of this atomized, transient, and deracinated trend is loneliness and loss for young and old alike.
We can reverse this socio-cultural tragedy. One is to recognize that the next generations need their elders just as much in their retirement and elder years as when they were generating income.
I get it — as a father of a single-income, large family whose “vacations” are either staycations or visiting extended family with free room and board, I’m eager for when my wife and I might have the freedom and expendable income to travel. But I also know my kids will need us to provide guidance, childcare, and probably sometimes a free room as they begin their careers and families. Boomers and Gen Xers should consider both the things they hope to do and see once unshackled from the daily grind, but also what their progeny need from them.
This extends to where you live in retirement. That beach house near the golf course may sound amazing, but is it anywhere close to where your kids and their families are? And even if you have an “open house” policy where your kids can come visit, will they really do that more than once or twice a year? Being closer to your kids and grandkids is far more valuable to them than having a distant “get away” place, and not just because of the free childcare. It’s also about helping you.
The older generation needs younger ones to reinvigorate a sense of wonder and keep them connected to youth. Spending your elder years in the company of other older people playing bridge or pickleball may sound appealing, but as I’ve witnessed many times from family and friends, it soon becomes tedious and isolating, because it is fundamentally self-focused.
Regardless of our state in life, we need to be drawn out of ourselves, and cross-generational relations do this like little else. “Significant interaction between members of three human generations is meaningful and formative for each of them,” philosophy professor John Cuddeback argues in his excellent new book, The Intentional Household: Living As If People Matter.
Moreover, those benefits become more manifest as we age. If you live near your kids and grandkids, they can help you take care of your property, pick up your groceries, and just check in on you. After college, I lived ten minutes from my grandparents, and stopped by regularly, often for less than 30 minutes. But every time I did, they were overjoyed to see me.
As we get older, our world narrows, and we feel forgotten. “The physical needs of the aging engage the younger generations by giving them a key opportunity to serve, and this proximity enables the aging to serve the young in various forms of mentoring,” writes Cuddeback.
Conservatives pride ourselves on prioritizing family and tradition. Yet the character of our economy and the way we think of retirement often works against those authentic goods, sometimes for reasons largely outside our control. But families dissipate and traditions disappear when the generations are far from one another and not intimately involved in each others’ lives.
I can attest to the incredible value of having family nearby. My mother, who is retired, lives three miles from us. She stops by most days, helping drive kids to activities and even leveraging her professional background to assist with home-schooling, saving us time and money. My kids bring a liveliness and sense of fulfillment to her life she wouldn’t have if she were in a retirement community or at some far-flung beach house. As my kids get older, they will be more able to help her with her house and her needs, as well.
Inheritance is not all about money, although that’s certainly something, especially when considering how to pay for kids’ college or much-needed home renovations. It’s also about what one generation bequeaths to the next in culture, values, and traditions. So please, don’t throw your retirement money (and time) at strangers. Your children and grandchildren need you, even if they don’t always know how to articulate it.
