Hard Financial Choices Await Middle-Aged

Whether by choice or necessity, the savings and investment habits of American household money managers probably will become a subject of increasing urgency as the 1990s pass.

That’s the sober view expressed by a wide variety of financial experts as they survey today’s slow-growing economy and the changing makeup of the nation’s population.

The huge “baby boom” generation of children born after World War II, now reaching middle age, is approaching a showdown with demands to finance retirement and family education needs.

At the same time, some powerful engines of prosperity, such as the market for residential real estate, show signs of failing to live up to their past performance.

As the yuppies of the ‘80s become the “grumpies,” or grown-up mature professionals, of the ‘90s, “many of them have been slapped in the face,” says Tom Drake, a partner in charge of financial planning services at the accounting firm Arthur Andersen & Co.

Because they were born and raised in a climate of strong growth and relatively few economic calamities, Drake says, “we are a spoiled lot, if you will. There was just not a lot of suffering you had to go through.”

Advisers like Drake emphasize that they are not trying to make some apocalyptic moral issue out of all this. Indeed, he says, many clients he sees have energy, talent and a lot of other resources.

As a result, a good many observers believe the “grumpies” are still in an excellent position to command their own financial destinies and build up the nation’s aggregate savings arsenal.

Just how much they earn and save will depend on how much opportunity the economy provides them to exercise their productivity and on whether the investment markets provide them with solid returns on their money.