Consumer spending is driven by people in their 40s and early 50s. That’s when people buy or build bigger, more expensive homes. Generation X is not only smaller, but also more frugal than boomers, so the experts are suggesting that consumer spending is likely to slow until the mid-2030s. Not just in the United States, but in Europe and some other markets worldwide. (Check it out on HarvardBusiness.org.)

Now consider the consumer spending impact of the huge losses suffered by the nation’s 50+ boomers who held an estimated $5.1 trillion in retirement accounts at the end of the 3Q last year, according to the Urban Institute. It also noted that the typical retirement account for 50+ savers has half of its assets in stocks.

None of this suggests a return to “normal” consumer spending or home buying anytime soon.

Everywhere you look are references to boomers “downsizing” – their spending, their homes, their lifestyles. There is a lot of talk about “financial stress,” a polite way of saying worry about money, and women seem to be more affected by this than men. Hmmm. (In case you are wondering, that was from a survey back in 2Q last year by Opinion Research Corporation for Bell Investment Advisors, which found that 35% of affluent female boomers reported considerably more financial stress than men, 24%.)

Keep in mind the data crunchers still haven’t cranked out the full impact of the financial and market meltdowns on those among the over 78 million boomers who are closest to retirement – those already over age 60.

But this memo isn’t about boom-and-gloom, it’s about realizing the realities of our economic situation and engaging in some creative public policy (making some lemonade out of these sour times). A few thought-starters:

• Testing new zoning and other local building permit approaches to accommodate boomers who want to “age in place;”
• Encouraging builders to consider smaller, greener home designs;
• Getting serious at last about “smart growth” policies, including providing incentives for communities built for walking and easy access to public transit;
• Boosting the incentives for boomers who will continue working full time to delay applying for Social Security even after age 70.

It also wouldn’t hurt to keep these thoughts in mind as you consider how we can pull ourselves out of this mess – from research presented last year by Zimmer Marketing Group and Corporate Research in interviews with U.S. housing executives:

• Boomers are leading healthier, more active lives for much longer periods. Sixty really is the new forty.
• Eighty percent use computers daily.
• Boomers demand excitement; they can’t sit still – jogging, biking, walking, yoga, tai chi – are part of their routines.
• They don’t want cookie-cutter housing developments – they do want good transportation infrastructure and easy access to shopping.
• Eighty percent don’t ever plan to retire.

Donna Rohrer