Older baby boomers caught all the breaks

— -- In a generation as sprawling as the baby boomers, you're bound to notice some big differences. And the main difference is probably this: The older boomers, exemplified by the 62-year-olds who will start retiring this year, occupy a demographic sweet spot that most younger boomers can't match.

The first of the baby boom generation — those 79 million people born from 1946 through 1964 — are just starting to reach the age when they can tap Social Security.

And those older ones got all the good toys:

•Cheaper houses. A boomer born in 1946 who bought her home in 1976, at age 30, would have paid about $39,300, according to the Census Bureau. That's equal to $145,200 now, adjusted for inflation. By contrast, a boomer born in 1964 who also bought his first house 30 years later would have paid $130,000, or $174,000 in inflation-adjusted dollars.

•Better retirement benefits. Early boomers are more likely to have a traditional "defined-benefit" pension from their employer than younger boomers are, notes Ron Gebhardtsbauer, senior pension fellow for the American Academy of Actuaries. Unlike 401(k) plans, traditional pensions require no contributions from the employee; all money comes from their employer. Older boomers qualified for "great pensions at a young age," he says, in addition to 401(k) accounts, which arrived later.

About 39% of all private-sector employees were beneficiaries of traditional pension plans in 1980, according to the Employee Benefit Research Institute; that figure fell to 18% by 2006, the last year for which figures are available.

Traditional pensions guarantee a payment for life, even though the value of that pension typically diminishes because of inflation. But younger boomers generally have only 401(k) retirement savings plans. And they're likely to live longer than older boomers, thereby facing a higher risk of running out of money before they die.

•Superior investment returns. A boomer who started investing in the Standard & Poor's 500-stock index 30 years ago would have received a 12.95% average annual return, according to Lipper. One who started investing 20 years ago would have earned an average 11.8% a year. The difference in return might not seem like much. But it's huge over time. If you invested $100 a month in the S&P 500 starting 30 years ago, you'd have $329,000 now. If you started 20 years ago, you'd have $74,500. Sure, you'd have put in $12,000 less, but you'd need an average annual return of 14.4% for the next 10 years, or you'd need to put in a lot more than $100 a month, to catch up.