Despite the growing focus on the need of baby boomers to save money for retirement after the economic downturn took its toll on retirement accounts and home values, baby boomers are still spending money on other things.
And their expenses have changed due to other influences such as the job market taking a toll on younger workers, finds a recent study by the National Center for Policy Analysis.
Baby boomers are spending more on education, the study finds, with education expenditures growing by 80% for 45 to 54 year olds and 22% for 55 to 64 year olds between 1990 and 2010.
“Though some individuals choose to further their own education during midlife, it is likely that many baby boomers are helping their college-age children with college expenses and loan payments,” the report states.
More than half of parents are providing financial support to their adult children who are no longer in school, adding to the stress on household finances, the study finds.
Another category of spending where baby boomers are growing their expenditures: mortgage debt. This is typically the largest monthly expense, according to NCPA, but it’s getting bigger as the median house size has gone up over the past two decades with home price growth outpacing income growth, peaking in 2004 and 2005.
In other spending categories food and entertainment, boomers are spending less. During the 1990 to 2010 time frame food spending fell 18%, household furnishings fell a third, and clothing expenses fell more than 40%.
Written by Elizabeth Ecker