Between the end of the big-band era (1946) and the arrival of the Beatles (1964), 72 million members of the baby boomer generation were born, grew up, and eventually had to deal with their finances—that is, when they weren’t attending Woodstock, if you believe popular culture.
Baby boomers, who range from 58 to 76 years old, are typically fiscally conservative, and the majority are at least somewhat confident in managing their finances, according to the 2022 Investopedia Financial Literacy Survey, which polled 4,000 U.S. adults via an online questionnaire.
They’re also often considered goal-centric, independent, and resourceful, according to multiple studies about the generation’s traits. And though there are now more millennials than boomers in the world, the latter still control 50% of all the wealth in the U.S.—more than any other generation.
- Baby boomers (born 1946 through 1964) are confident in their financial knowledge, and their No.1 piece of advice is as old as personal finance itself: Start saving early.
- Eighty-three percent of boomers are at least somewhat confident about managing their finances, and just a small amount (5%) say they are “not at all confident.”
- When it comes to understanding digital currency, 77% consider themselves beginners.
- Seventy percent of working boomers expect to support themselves with Social Security when they retire.
- The No.1 relevant skill boomers would like to acquire is how to keep their financial information safe online today.
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Take Mark, 70, and his wife, Mary, 66—they prefer using first names only for privacy reasons—who are retired and live near Chicago. Mary held a series of executive positions during her working years, while Mark worked for the government.
Today, Mark has the financial responsibility of taking care of an elderly family member’s budget, in addition to his and Mary’s, because the family member’s income decreased as a result of her husband’s death. In this role, Mark pays particularly close attention to the family member’s home expenses, planning, and budgeting for anticipated costs.
Seventy-three-year-old Tom Maines of Waynesboro, Pa., is also retired—from a 24-year military career, in his case—followed by another 19 years as a civilian government employee. Like many boomers, he and his wife Cindy, who died in 2019 from cancer, experienced difficult financial circumstances early in their marriage.
“I met Cindy in Taiwan in 1970,” Maines said. “We married in 1973 and transferred to Fort Sill, Okla. When we arrived, our gas tank was empty. So were the pantry, refrigerator, and bank account...Thanks to a small loan and some constructive financial guidance from the Army Emergency Relief fund, we made it. Almost 50 years later, I still donate annually to AER.”
Certified public accountant (CPA) John Bunyan, on the other hand, retires in a few months and looks forward to ramping up his semi-pro career as a comedy writer and stand-up comedian. John and his wife, Karen, live in Cincinnati, where John’s sense of humor is as essential to the couple’s financial peace of mind as his CPA license. “My retirement,” he said, “will be funded by a carefully balanced portfolio of 401(k) and IRA funds, Social Security, and lottery scratch-off winnings.”
Though Bunyan’s first finance lesson was in a high school class where he learned how to manage a checking account, his views on money management were forged at home.
“Watching my mother struggle with being a single working mom and with pay disparities for women gave me insight into the need for financial planning, savings, and budgeting.”
For all of these baby boomers, there’s one clear trend: Comprehending your financial situation and doing something about it early is key.
Talking and Reading Has Inspired Financial Confidence
Given their generational traits, it’s not surprising that 83% of boomers are at least somewhat confident about managing their finances. Just a small minority of boomers (5%) say they are “not at all confident.”
This confidence comes mostly from reading about finance and from conversations with others. Based on Investopedia’s survey data, 37% of boomers prefer reading as a learning tool, and 35% prefer talking to others. All other modes including watching videos (9%), game simulation (8%), taking a class (4%), and podcasts (4%), received single-digit responses.
When it comes to where they actually go for their financial information, 40% of boomers say their top sources are family and friends or the Internet.
“We are very confident in our level of financial knowledge,” Mary says. “We have studied financial matters for decades and recognize that it is vital to have a solid foundation in how money works to lead a happy life. Ignorance about money is not bliss.”
Maines touches on a similar theme about his lengthy experience managing finances. “At this point, I’m confident about my ability to manage money,” he said. “Been doing it a long time.”
Bunyan says he is only “somewhat confident” about his finances. “I feel like I do about writing comedy: I’m good enough, though I know there are better people at it than me.” For him, the best strategy is speaking with investment managers, friends, and professional associates.
Strength in Budgeting, Taxes, and Insurance
Most boomers' knowledge about managing money isn’t the same across all finance areas. Investopedia survey data shows that the highest perceived level of expertise applies to consumption (or budgeting) and paying taxes, followed by insurance.
Eighty-two percent of boomers say they are at an intermediate or advanced level of managing a budget. Only 18% see themselves as beginners when it comes to this area.
By contrast, a scant 23% of boomers surveyed say they have an intermediate or higher level of knowledge about digital currency. Even high-level money managers like Mark and Mary cite a lack of knowledge about cryptocurrency: “We have studied crypto very minimally but continue to read about it and work to deepen our knowledge.”
For Bunyan, tax expertise is a job requirement. When he first started, he struggled with the complexity of tax regulations, though now he says, “A wise old tax professional told me never to look for logic or reason in the U.S. tax code. That advice became key to my understanding of all tax law.”
Bunyan is not alone in his understanding of taxes. Fifty percent of boomers say they have an advanced understanding of the concept of paying taxes.
Mark and Mary have long leaned on financial advisors for basic information on most money-related topics, including insurance. In addition, the couple cites research as a critical part of their financial learning curve.
From a young age, Mark’s father drove home the notion of saving for him. “That was probably the best financial advice I ever received,” he said. “Interestingly, the worst advice I ever received was always to invest conservatively. That also came from my dad. Nobody’s right all the time.”
Retirements Funded by Social Security and Traditional Investments
Among those surveyed by Investopedia, 62% are retired, and 23% say they expect to retire, leaving 16% unsure they will ever be able to quit working. A significant majority (70%) of still-working boomers expect to be able to support themselves with Social Security when they are no longer able to work. That may be more wishful thinking than reality.
According to the Social Security Board of Trustees, Social Security benefits will be fully payable until trust fund reserves are exhausted in 2034. After that, collections will pay 78% of scheduled benefits, likely resulting in benefit reductions, payroll tax rate hikes, or both.
When it comes to other retirement expectations, more than 25% of survey participants expect to receive retirement income from pensions and 401(k)s. Others expect income from savings, certificates of deposits (CDs), and market investments.
Maines is one of the lucky boomers entitled to a defined-benefit pension. Two actually: one from military service and the other from his post-military civilian job. He says the combination of Social Security and government pensions he receives is sufficient for his needs and “90% guaranteed,” so he isn’t worried about outliving his retirement income.
About 43% of boomers are invested, and the most common investments are primarily in stocks (27%) and mutual funds (24%), followed distantly by index funds and ETFs. According to Investopedia survey data, male boomers are more likely to invest than women (50% versus 35%). And those with incomes over $75,000 annually are twice as likely (73%) to invest than those making $75,000 or less (32%).
“We began preparing for retirement in our early 20s when we began to work full time,” Mary said. “We have been retired for eight years now.” According to Mary, a good financial foundation and support from their advisors are key to their belief that their retirement is secure.
Time and experience are great teachers. Boomers have a wealth of both, so it should be no surprise that 25% of those surveyed say no aspect of managing their finances concerns them. Among those who worry, retirement and living within their means top the list.
There’s Still More to Learn
According to the 2022 Investopedia Financial Literacy Survey, 14% of baby boomers say they have a firm grasp of new financial products or technologies—that’s compared to 33% of Gen Z, 45% of millennials, and 35% of Gen X. Just 5% of boomers say they could explain cryptocurrency, and a paltry 3% could explain NFTs.
This is not to say boomers have no interest in gaining more understanding and skill. Here’s how some of those interviewed really feel:
- Bunyan has learned enough to become convinced that digital currency is not for him.
- Maines wants to fill in his knowledge gaps regarding annuities, such as the one from which he will soon draw.
- Mark and Mary are less interested in emerging technologies and more interested in the No.1 skill boomers say they would like to acquire: how to keep financial information safe online.
Marco Bellin, founder of Datacappy—a virtual private network (VPN) specializing in privacy—says it’s important to impose limits on the data applications pull from your account to protect personal information online. “For example, to keep advertisers from accessing your location data and targeting you with hyper-precise ads, request the app never to track your location.”
When it comes to keeping personal data like Social Security and credit card numbers safe, cloud security—the measures undertaken to protect digital assets and data stored online via cloud services providers—may be a good option to consider. In addition to downloading a VPN, this includes two-factor authorization (2FA), security tokens, data encryption, and more.
How Can Baby Boomers Help Others?
Decades of experience put boomers in a position to share their knowledge with younger generations. The interviewees agree on one thing above all others: Start saving now. Beyond that, it’s a mixed bag.
“Money is not a mystery,” Mary said. “It doesn’t just vanish or appear. Invest in yourself; no one else will. Assume that you will need to take care of yourself financially when you retire and plan accordingly.”
Taking a page out of the boomer social justice playbook, Bunyan advises, “If you don’t like how things are, get involved. Work on and advocate for changing tax and other financial laws and regulations if you believe they are unfair.”
Maines, on the other hand, warns that despite our best-laid plans, the “unplanned” happens. As he continues to adjust to life as single after 46 years of marriage, Tom offers this observation: “Although I still find it difficult when trying to plan for things Cindy and I used to plan together, I am not depressed or stressed. I am financially secure, and that allows me to enjoy time with my sons and my grandkids and experience what’s truly important in life.”
The 2022 Investopedia Financial Literacy Survey quantifies U.S. adults’ understanding of their own financial literacy on a generational level. The survey was fielded via an opt-in, online self-administered questionnaire between Jan. 27 through Feb. 7, 2022, to 4,000 U.S. adults, with 1,000 each from the following generations: Generation Z (18-25), millennials (26-41), Generation X (42-57), and baby boomers (58-76). Quotas and data weighting served to ensure race/ethnicity, gender, regional, and income representation among the total and within each generation. To learn more, see the full methodology.
Survey research and data analysis led by Amanda Morelli.