A new season for baby boomers: Mattress manufacturers would be wise to keep this consumer generation in mind as they shift into retirement
by Julie A. Palm
July 15, 2015
Lots of boomer dollars are already committed
Mattress manufacturers don’t just compete with other mattress makers for the consumer’s dollar—they compete with all sorts of financial demands. And, unfortunately, for the mattress industry, today many boomers are stretched thin.
A 2012 study by the National Center for Policy Analysis looked at how boomers’ spending habits compared with people of the same ages two decades earlier and found boomers have greater demands on their wallets. (The age cohorts of the study—“middle-age workers” 45 to 54 and “older workers” 55 to 64—don’t exactly match the ages of boomers but are illustrative nonetheless.)
For instance, despite being out of school for decades themselves, boomers still are paying for education—either their own student loans or the school bills of their children. In addition, nearly half of boomers are helping to support their adult children by paying housing costs, living expenses, transportation costs and other bills.
Perhaps more expected, health care also is draining finances: 55- to 64-year-olds are paying 21% more and 45- to 54-year-olds are paying 30% more for out-of-pocket costs and insurance premiums than people their same age 20 years earlier.
And then there’s housing. The amount both age groups spend on mortgages, taxes, maintenance and insurance is up 25%.
Making things all the more difficult financially for boomers is the fact that sources of wealth they were counting on for retirement took a big hit during the Great Recession and, in some cases, personal portfolios have not rebounded, wrote Peter Grandich, financial adviser and commentator, in a 2010 blog post on Demodirt.com.
“Baby boomers were raised to believe that if they saved enough during their working years, when they retired they could live off the interest of their savings. Obviously, with interest rates on CDs at 3% or less, that’s no longer true. To make matters worse, they ‘chased yield’—trying to make up some of their losses on riskier investments like real estate, which tanked even harder,” Grandich wrote. “The second thing that has clobbered the baby boomers financially is the decline of their two most important investments: their stock portfolios and their homes. Everybody knows what happened there. Boomers planned on cashing in when they liquidated homes and stocks, which are now worth a fraction of just a few years ago … and they do not have the years to wait for a rebound.”