And now for the good news. There are some who see the prediction of economic collapse due to the retirement of the Baby Boomers as hogwash. The collapse theory states in part that the generation that loaded up on stocks as they saved for retirement will crash the market once they sell those shares to pay for retirement. But critics point to several factors that will mitigate this possibility. GLOBALIZATION: 40% of corporate profits are coming from consumers overseas, not necessarily Baby Boomers. INHERITANCE: Two-thirds of Boomers will receive an inheritance, much of which will be spent rather than saved. STAGGERED RETIREMENTS: The retirement of Baby Boomers will be a long, slow process taking place over 20 years, not a rapid surge that would crash the market. NO REASON TO CASH OUT ALL AT ONCE: Theres no reason to assume theyll choose a lump-sum liquidation of assets into cash. More likely, theyll convert 401Ks to annuities. This doesnt remove the disruption from such a big generational shift entirely, but will make it easier to handle. The real threats are political inaction on fixing the broken Social Security and healthcare systems, both of which could buckle under the weight of Baby Boomers. SOURCE: seekingalpha/article/1378311-5-reasons-why-were-not-going-over-the-demographic-cliff
Posted on: Fri, 14 Feb 2014 13:35:50 +0000
Trending Topics
Recently Viewed Topics
© 2015