The Way Old People Spend Is Bad News For The Economy

[xchrom]

http://www.businessinsider.com/changes-in-spending-with-age-2014-3

Household spending peaks at around age 45 for the average American. This is according to Census data analyzed by JP Morgan Asset Management.

As you can see in the chart below, spending in most categories begin to decline after age 45.

Future spending needs and habits are important considerations for people planning for retirement.

From an economic and policy standpoint, it's critically important to understand evolving spending behavior especially as demographics shift.

The most notable of demographic shifts is the aging of America's baby boomers.



Read more: http://www.businessinsider.com/changes-in-spending-with-age-2014-3#ixzz2wspPMID3

[Capt. Obvious]

1. Blame their frugal ways

Halving meds and eating cat food.
They're killing the economy the selfish jerks.

[malaise]

2. That's when the robber barons and other scammers jump in and steal their savings

They intend to get that money one way or another.

[Skidmore]

3. Doesn't look like they make a cognitive connection between

the decrease in spending and the decrease in income over the lifespan that most people experience. And, they certainly don't factor in the income lost to the raiding of pension plans and retirement funds by the big guys either.

[xchrom]

4. i'm mildly amused they didn't include the words 'surprise' or 'unexpected'. nt

[hatrack]

5. Or my personal favorite, the "surprised economist"

[seaglass]

13. I'm mildly amused that people at age 45 are considered old - some young whippersnapper

must have written the headline...lol

[el_bryanto]

6. I'm a capitalist but it's clear there's something wrong when your economic plan depends on people

spending like morons to keep it going.

Now if you'll excuse me I just saw this thing on the home shopping network I didn't realize existed but now I know I can't live without.

Bryant

[hatrack]

7. Yes, it's almost as if . . . as if old people spent as if they didn't have much money!!

Good thing there's no other substantial demographic that applies to these days!

[badtoworse]

8. Maybe we just don't need a lot more stuff

Seriously, there are lots of things you buy that will last a lifetime if you buy quality the first time. Our kitchen stuff and the tools in my workshop are two examples.

[Blue_Adept]

9. There's also just lifestyle changes

I'm nearing this point myself and I find myself looking to go minimal for many things. I'm buying less that the kids need for example. My parents are the types that stopped doing a lot of purchasing as well simply because as style and so forth changes, they had less interest in it with where it's going.

Your needs change when you get older, as the kids move out, etc etc. There's less a need for stuff, particularly if you've accumulated a lot of stuff over the years.

[MineralMan]

10. Household income also goes down after 65.

Hence, household spending also goes down. It's not voluntary frugality. It's involuntary reality.

[MindPilot]

11. Well, Duh!

You hit a point where you have almost everything you need. I'll be 60 this year; most of the things I have now, tools, furniture, car, even clothing will last.In fact I'm feeling now like I have too much stuff and I want to start getting rid of a bunch of it. The largest chuck of money I will likely spend in the future will be some major work on my house. (But given that my house may very well be under water--literally--within 20-30 years, there may not be much point.)

The thing I find remarkable about that chart is that spending on health care is almost flat.

[HereSince1628]

15. Somehow I get the feeling awareness of pending dental and medical expenses going up

are also components in these choices. It's not like spending stops it just changes...

and the best things in life are suddenly no longer FREE or covered by medicare part D!

[global1]

12. So The Question Is What Can Be Done To Counter This.....

We need to get the younger people just coming up - into a buying mode. However, they are burdened with student loans; there are no jobs and the jobs that they do get are not paying well.

So what can be done?

Get the older people out of the workforce earlier. Reduce retirement age. Increase social security benefits for them. Provide them with some property tax breaks (cause even it they have paid off their house - property taxes become a factor). Provide them with good health benefits by enhancing Medicare and completely removing the donut hole in Part D.

With older people out of the workforce earlier - more jobs open up for the young that are just starting out their lives. There is still that knotty problem of student loan debt. Can the U.S. government pay that off for them? Provide them an amnesty - so to speak. It would be less expensive than the wars we start and it would be a great stimulus to the economy. Cause all that money that was slated for paying off a student loan - can now be used to buy a car; buy a house; furnish a house; begin a family; etc. These are all things that stimulate the economy.

Oh - and maybe the minimum wage can be boosted to $10.10 or even higher. And how about throwing in a single payer health care system too.

And maybe we can initiate a broad program of infrastructure rebuilding. That certainly would create more jobs.

And how about a stock trade transaction tax. That certainly would raise a lot of much needed tax monies to help pay for this. Why shouldn't the Banksters and Wall Street contribute to boosting the economy - they will reap benefits anyway - when the young people have some money to invest.

Once people are back in jobs - demand for stuff will go up. When demand goes up - more jobs are created so that the stuff demanded is available when the stuff is wanted. More people at work - churns the economy - because these now more people have money to spend for more stuff. They pay taxes on the stuff they buy. The stuff they use.

All in all - this is what will fuel the economy. It's not rocket science folks. It just takes a commitment to make it happen. Like putting a man on the moon.

I'm one of those older folks that this post was directed at. I'm burdened by the fact that I'm coming to the end of my career and my income will be greatly reduced. I don't need new clothes. I don't need to furnish a house. I need health care. I need food. I would like to live a reasonably comfortable life in the house it took me all my life to get, furnish and care for. I would like to go on a vacation - to get away - and sit back and reflect on what I've accomplished in my life. It's hard to justify a vacation when one has to worry about just living the life one has become accustomed to. The harsh reality is that I won't be able to do that. I going to have to soon make some severe decisions that will alter my way of life - just to be able to keep my head above water.

And so the circle goes.

Again - what needs to be done and can be done is not rocket science. It's staring us in the face. We all know that - but our elected officials are more worried about their lives and livelihood than those of us that elected them. They are playing politics with the American People as their game pieces.

This next election in November is going to be the most important election of our lifetimes. If the Repubs maintain the House and capture the Senate - we're all screwed. We know what is coming. It will only be harder for all of us - if not futile.

So talk to your voting age kids and their friends. Stress the importance to them to GOTV. Talk to the rest of your family, your friends and associates and let them know how important it is to GOTV. We can't go into November - being non-motivated or we're sunk.

Thank you for indulging me in this sort of rant.

[magical thyme]

14. give me some money, I'll be happy to spend it.

My home needs repairs. My car has 230K miles. My older dog with bad hips is going to need a ramp to get in and out of bed this year.