Boomer Wealth Surging

Many older Americans have reaped an unexpected pandemic bonanza, thanks to a combination of a stock market surge and rising home prices. That good fortune is evident in the St. Armands Circle shopping district in Sarasota, Fla., where visitors stroll past statues of Venus and Dionysus and lunch on Cuban sandwiches and sangria. The number of homes in the area selling for $3 million or more has shot up to 355 so far this year from a pre-pandemic 81 in 2019. And many of the buyers are of retirement age, says Drayton Saunders, president of Michael Saunders & Co., a real estate broker specializing in luxury properties.

A Covid-induced boom in early retirements is exacerbating America’s inequalities, especially along this stretch of the Gulf Coast. Sarasota and its environs are seeing an influx of cash-rich baby boomers and work-from-home professionals that’s pricing younger residents out of the housing market. Some also worry that a bigger senior population may worsen Florida’s historic difficulties in passing taxes for school and infrastructure projects. “They typically vote, and they may not vote for your schools unless their grandkids are in your schools,” says Jerry Parrish, chief economist of the Florida Chamber of Commerce’s research foundation.

Condo complexes facing Sarasota Bay.
PHOTOGRAPHER: ZACK WITTMAN/BLOOMBERG

By 2045 a quarter of Sarasota County will be 75 or older, and community activist Jon Thaxton wonders where the area will find enough care workers—often low-paid and with limited transportation—to staff all the luxury retirement homes “popping up like mushrooms after the rain.” An executive at the Gulf Coast Community Foundation, a civic advocacy group, he sees the coming crisis as a harbinger of a nationwide problem. “Our age demographic just happens to be 15 years ahead of the rest of the country,” Thaxton says. “We might be the canary in the coal mine.”

Homes under construction in Lakewood Ranch, Fla.
PHOTOGRAPHER: ZACK WITTMAN/BLOOMBERG

The obvious health toll notwithstanding, older Americans have largely prospered from government efforts to salve the economic pain Covid has caused. Boomers (born in 1946-64) accumulated more than $1.6 trillion in excess savings in the past two years, almost double what Generation X (born in 1965-80) put away, according to Federal Reserve data. Boomers also saw the biggest overall gain in wealth during the pandemic, with their combined wealth growing by $12.8 trillion, or about 23%. They edged out Generation X by about $100 billion, Fed figures show, but because that younger set has fewer people overall, it realized a larger per-capita wealth gain.  READ MORE...