TV Land Survey Sounds Self-Serving

by Nancy Mills

TV Land, a cable television channel owned by Viacom, released survey results this weekend that claim that most Baby Boomers identify themselves as members of the TV Generation, not the Baby Boom.

How convenient for TV Land! Those of us born after World War II are part of the Boom, whether or not we identify with that description. We are also the first generation to be raised on television. But so were my children. So are we all part of the TV generation?

Most "Leading Edge" Boomers who are now 50-60 years old remember when TV sets had small, greenish screens, came in huge cabinets and had short national newscasts. My Dad worked in television, selling advertising time, so TV was important in our home. I remember our first color TV with fondness...it made our house the popular place to be to watch Bonanza and Disney!

But that was then and this is now...and I'm still a Boomer! I watch a lot less television than I did growing up. And I never watch TV Land! The reruns of old sitcoms just don't get me excited...been there, done that. What have you got for me today?

The survey also asked Boomers to name the most important cultural event of their youth. Did they name the fight for Civil Rights or the Women's Rights movement? Environmental awareness? Growing prosperity and college attendance? No. They voted for the birth of cable television! Second was the creation of color tv. I really want to know how the questions were asked in this survey! What were the choices for answers?

Television has been important in my life. I've worked in TV and media most of my life. But when it comes to demographics, I'm a Baby Boomer. TV Land is dreaming if it thinks that's going to change.

Survey Says Boomers Hope to Inherit More than Money

by Nancy Mills

We recently heard from Boston area financial advisor Larry Diamond about a Harris Poll conducted for Allianz Life that debunks the myth that Baby Boomers are counting on a legacy of money...and only money...from their parents.

"The most important asset for both generations — by a large margin — is ‘values and life lessons,’ named by more than three quarters of boomers and their parents," says Diamond. "The second most important asset, named by two thirds of Boomers and over half of their parents is ‘instructions and last wishes'."

Diamond also says that for Boomers, ‘personal family possessions with emotional value’ was rated third at 34% and financial assets was a distant last, rated by only 10% as a priority.

Remember the "Generation Gap" - the communication and cultural distance that many of us had with our parents? Well, in a way it's back. According to Allianz Life, "This time the gap is around the transfer of $25 trillion in wealth to be handed down by the elder generation to their heirs." Elders, for example, are 22% more likely than Boomers to think that they owe their children an inheritance.

When Boomers and their parents were asked if there had been adequate discussion about intergenerational asset transfers, barely a third in each group said "Yes." The least discussed items: 1- values and life lessons and 2- instructions and last wishes. Perhaps it's easier to focus on the dollars, not the feelings.

Diamond says financial planners should encourage Boomers to talk to their parents about legacy planning. And they should be thinking about the legacy they want to leave to their children and to society.

"A key question that I always ask of all my pre-retiree and retiree clients is ‘how would you like to be remembered when you die?’ This question is one that all of the professionals who work in this field — especially attorneys, financial planners,and accountants — should ask and emphasize to achieve the objective of intergenerational transfers which best satisfy the needs and desires of all family members," says Diamond.

Bernanke’s Boomer Alert

By Mark Mills, CFP

In a recent speech, Federal Reserve Chairman Ben Bernanke called social security and Medicare “unsustainable entitlement programs.” It was a warning of special interest to Boomers.

Facing an aging population with longer life expectancies, the federal government, said Bernanke, will not be able to provide promised benefits without huge tax increases, major budget cuts in other areas, or piling hundreds of billions of dollars onto the national debt (i.e. passing the burden onto our children and grandchildren.)

How bad is the emerging entitlement crunch? Bernanke says social security and Medicare “will increase from about 7 percent of the U.S. gross domestic product (GDP) today to almost 13 percent of GDP by 2030.” That’s a staggering increase in a relatively short time. But remember, there are 78-million Boomers who will be running up Medicare bills and waiting for that social security deposit on the first of the month.

Taxing our way out of the problem would mean federal revenues would have to rise from about 18 percent of GDP today to about 24 percent of GDP in 2030, an increase of one-third in the tax burden over the next twenty-five years, according to the Fed chief. Inflicting that punishing level of taxation seems unconscionable, not to mention politically impossible.

In the wake of 9/11, with huge increases in defense spending, cutting hundreds of billions in “non-entitlement” spending also seems unlikely.

Bernanke mentioned another option: reform of the major entitlement programs. He did not give specific recommendations. That is a political issue, and both Presidents Clinton and Bush have failed in their efforts to achieve social security reform. Congress just doesn’t have the stomach to cut benefits or raise taxes, especially when the worst of this slow motion disaster will happen on somebody else’s watch, years down the line.

All I can say to Boomers is get ready for a cut in benefits. We will have intergenerational warfare if we try to lay this entire burden on our kids and grandkids. Who wants to do that, anyway?

The cuts could come in many ways, including delaying eligibility for full
benefits, reducing benefits for more affluent recipients (means testing), trimming back cost of living adjustments, higher co-pays and fees for Medicare. It’s a bottomless bag of tricks. But in the end, many Boomers will not get what they have been promised.

While Congress has no guts when it comes to solving tough problems, they did pass a law requiring the Social Security Administration to send out annual personal statements to workers detailing their projected social security benefits. Yes, the statement says somewhere that the benefits are not guaranteed. But what’s the point in sending it out? It seems morally bankrupt to send out a statement projecting a level of benefits the Fed chairman says is “unsustainable.” When Alan Greenspan ran the Fed he issued the same warning, repeatedly.

Both Fed chiefs also said the sooner action is taken the more time people will have to plan for the downward adjustments. By delaying action, Congress spares itself the political risk, but makes the eventual outcome more painful for Boomers and the rest of the nation.

Link to full text of Bernanke's speech.