Boom and bust for the silent generation

Life started hard for those born in 1938. Then it got better and stayed that way for a long, long time. Born at the end of the Great Depression and on the cusp of the Second World War, their childhoods were likely filled with domestic tumult and financial hardship. But as they entered adulthood in the 1950s, there were ample job opportunities, rapid promotion and easy prosperity. Thanks to a combination of demographic luck and prudent planning, children born in the late 1920s to early 1940s enjoyed unprecedented financial success. They did things right and were rewarded. But now, this same generation could be the hardest hit by the financial crisis — a return to the beginning, at precisely the wrong time.

For people like Ian Kerr, himself born in 1938, 2009 is the year they must begin their government-mandated withdrawals from retirement funds. Mr. Kerr, 70, spent 30 years as an executive with a glass and packaging company and a few more years working as a consultant. Over the years, he saved enough for at least 10 to 15 years of comfortable retirement, eventually moving from the Toronto area to the ski community of Collingwood, Ont. The market collapse this fall has now eliminated 45% to 50% of his retirement funds. “I thought I was sitting pretty with a reasonable nest egg, but when that gets cut in half, that’s pretty drastic,” Mr. Kerr said. “I wasn’t doing the flying high or looking for a huge windfall. I was just looking for steady compounding.”

While baby boomers fret about delaying retirement, observers say they still have a chance to rebound. It is the members of the “silent generation” like Mr. Kerr, the people too young to fight in the Second World War but too old to qualify as boomers, who may face the collapse without time to rebuild.

“We’re talking about people who, almost by definition have stopped working. These are not people who can wait out the recovery,” said Susan Eng, vice-president of advocacy for the Canadian Association of Retired Persons (CARP).

Born roughly between 1925 and 1945, the silent generation is small. With the Depression and then the war restricting birth rates, the generation had less than three million members in Canada, compared with the more than seven million boomers born between 1946 and 1966. Limited competition as they entered the workforce set a foundation for a lifetime of stability. “They were probably luckier than the baby boom,” said David Foot, a University of Toronto economics professor and author of Boom, Bust and Echo. “They entered the job market in the 1950s, they were promoted quickly, they did better than they ever expected to do and they’re the ones who are probably the richest people in the country.”

Favourable demographics explain part of the generation’s success, but their prosperity is not simply a matter of good timing. Raised in the shadow of people who had gone to war (the “greatest generation” or “G. I. generation”), the Silents felt responsibility to build the world their predecessors fought to protect.

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