Association for Public Policy Analysis & Management

Analysts have reached dramatically different conclusions about the financial ability of baby boomers to fund their consumption throughout their retirements.  Some studies conclude that most baby boomers will have sufficient funds for a comfortable retirement, while others conclude just the opposite.  Regardless of one’s interpretation of existing evidence, there is unquestionably large variation in the resources available to baby boomers.  An understanding of the causes of this variation can help inform policy designed to aid households that fail to save sufficient resources for retirement.

In this paper, we focus on the question of how baby boomers accumulate resources for retirement.  Using data from the 1979 National Longitudinal Survey of Youth, we are able to follow a sample of several thousand baby boomers born in 1958-64 from age 20 to 50.   We model each sample member’s household net worth at age 50 as a function of detailed arrays of variables measuring educational investments, health, employment, family formation, household composition, and environmental factors over the preceding 30 years.  This strategy allows us to identify factors ranging from divorce to job loss to “boomerang” children that affect resource availability as baby boomers approach retirement age.