Personal Finance

7 Financial Benefits Baby Boomers Got That We'll Likely Never See Again

David Beren

Published: February 8, 2025 3:19 pm

When you reflect on the times baby boomers were growing up post-war, you might look back on them with envy. Everything was better in America, especially considering how far the dollar could take you when buying a house or car and still living a comfortable life. 

Unfortunately, many of the financial benefits the baby boomer generation enjoyed will no longer be available to future generations. As a result, many current generations, like Gen X and Gen Z, now find themselves in much different financial situations. 

Affordable Housing Market

Housing prices of the boomer generation have quickly disappeared since they purchased their first or second homes. During the 1970s and 1980s, the median home price was two to four times the median household income. Today, this number is closer to six to eight times the median household income, dramatically affecting overall affordability. 

In addition, during the 1970s, interest rates were relatively low, meaning mortgage costs were also equivalently low. This started to change slightly in the early 1980s after an interest rate spike, but by the end of the decade and early 1990s, mortgage rates were declining, making it easier to purchase a home without a huge mortgage payment. 

Ultimately, you also have to consider lending standards were less strict back then, as was the need for significant down payments. This allowed baby boomers to enter the housing market sooner, which would help them build more long-term wealth through home equity. 

This is very much contrary to where we are today and have been for the last few years, where the mortgage rate has hovered between 6 and 7%, pricing out millions of wannabe homeowners. As a result, there was a much higher rate of home ownership 40 years ago than today, a number that doesn’t appear to be evening out anytime soon. 

One Income Family 

Raising a family on one income is one consideration that gets plenty of attention and is becoming increasingly tricky. The baby boomer generation experienced this in great detail as one spouse worked and another attended to the house and family. Still, this reality is no longer as practical as it once was. While it’s not impossible, the likelihood that any trend allowing for one-income families to grow seems unlikely. 

Pension Plans Were Robust

Another significant benefit that baby boomers enjoyed in a big way that newer generations won’t be able to take advantage of is truly robust pension plans. Baby boomers frequently had access to employer-sponsored pension plans, which would provide a guaranteed retirement income. This enabled baby boomers to feel financially secure and took away any emphasis on growing personal savings. 

Today, there has been a monumental shift from pension plans to more defined-contribution plans like 401(k)s. While these can still utilize employer contributions to grow with employee matching, pension plans were undoubtedly far more attractive to retirees as they guaranteed a certain percentage of their working income, making it easy to plan for retirement. 

This shift toward defined-contribution plans is undoubtedly significantly affecting retirement planning. Today’s workforce has to balance their budgets and spend better to ensure that contributions are made toward retirement funds. This means less disposable income, which translates to working more and enjoying life less, negatively affecting the psyche of the current generational workforce. 

Reduced Education Costs

Can you imagine a world where you could graduate college without debt? This was a real-world scenario for baby boomers when tuition costs were lower, and many in this era didn’t need loans at all. Unfortunately, the student debt crisis is real for millennials and younger generations and negatively impacts almost every aspect of their lives. 

During the 1970s and 1980s, the cost of attending a four-year institution was a fraction of today’s rates. In 1975, the average tuition cost was $2,469 for one college year, including fees. Realistically, this same school likely costs at least four to eight times more than this number, and recent inflation has only grown this cost even more. 

To put this into more perspective, consider that over the last twenty years, private college tuition and fees have increased by 126%, while out-of-state tuition has risen by around 112%. Last but not least, in-state tuition and fees have increased by 133%. The result of these rising costs is the massive leap in student loan needs, which means that instead of trying to save for a home, recent college graduates in their 20s and 30s are spending a considerable portion of their income to pay off student debt. 

Affordable Healthcare

While healthcare has never been inexpensive, baby boomers benefited from employer-sponsored health plans with much lower premiums and better coverage. Today’s generations are paying a fortune for healthcare, and medical debt is one of the highest contributing reasons people file for bankruptcy. 

In 1970, per capita spending on health was a mere $356, or $2,144 in today’s dollars. By 2010, this number had risen to $8,402 per person, meaning that healthcare costs now consume much more of someone’s annual spending. This means that even a minor procedure can completely change how someone lives until it’s paid off. 

Favorable Job Markets

It has been well documented that a post-war economy led to a job boom, which made it easy for the greatest generation to create an environment that would welcome the baby boomer generation. Fortunately for baby boomers, this period of strong economic growth would continue for them, which meant low unemployment and increasingly growing wages. 

Of course, one of the most significant financial benefits for baby boomers that current generations will likely never enjoy is long-term employment with just one company. Today’s workforce regularly worries about a volatile job market, reduced benefits, and the rise of the gig economy, all to make ends meet and put food on the table. 

Ultimately, we see in the job market that productivity has had to increase while salaries have been mainly stagnant, making it harder to invest and save for retirement. As healthcare, childcare, and housing expenses are outpacing inflation, not seeing income growth is squeezing the disposable income for younger generations in a way baby boomers never had to worry about. 

The result is that younger generations are now forced to rely heavily on personal savings and investments to grow their wealth. This is concerning as they are much more susceptible to market volatility in a way pension-heavy baby boomers never had to worry about. 

Decline of the American Dream 

While the American Dream hasn’t completely disappeared, the baby boomer generation undoubtedly helped define it. However, younger generations find it increasingly difficult to enjoy the same success with home ownership and greater financial independence. 

Younger generations are also disadvantaged, as a lack of government action has put retirement programs like Medicare and Social Security at risk. These are two programs millennials and Gen X will be looking for to help them enjoy a better retirement lifestyle. 

The big takeaway from all of this is that the financial advantages enjoyed by baby boomers have led to a giant wealth gap between them and other generations. Whether this gap can ever be closed is an open question, but even if it can be, it will take decades.