Baby boomers can’t get a break. During their critical pre-retirement years, they’ve been hit hard by the technology bust, the real estate meltdown, the financial crisis, and the deepest recession since the 1930s.
And to make it worse, while their real income has barely budged over the past twenty years, their key expenditures have been going nowhere but up.
Here are the biggest budget-busters that are costing baby boomers a fortune:
Over the past twenty years, education costs have increased a whopping 80% for 45 to 54-year-olds as they continue to pay off pricey college educations for themselves and their children.
The recession has made it harder for grown children to find jobs and support themselves. As a result, more than half of parents are giving financial support to their adult children, pitching in to cover student loans, transportation and medical costs, and living expenses.
Not surprisingly, housing is the biggest monthly expense in most households, and over the past 20 years housing expenses – including mortgages, taxes, insurance, and maintenance – have increased 25%, even though mortgage rates have fallen over that same period. The reason? Boomers are buying substantially larger houses, with less money down, and using more cash-out refinancing and home equity loans, meaning mortgage debt burdens have gotten bigger.
Younger boomers have seen healthcare expenses, especially insurance premiums, climb by 30%. The increase in healthcare costs has “essentially wiped out the gains in median family income over the past decade,” according to research by the National Center for Policy Analysis.