Boomers won't create bears Generation's retirement won't sap financial markets: study
By Robert Powell, MarketWatch Last Update: 8:36 PM ET Aug 3, 2006 BOSTON (MarketWatch) -- For years now, pundits have been yelling "mayday, mayday, mayday" not about a current disaster, but about a forthcoming disaster. They are signaling their distress over what will happen to the stock market when some 77 million baby boomers retire over the next few decades. According to the pessimists, retiring boomers will sell their assets in such a way to cause a sharp and sudden decline in the stock and bond markets that turns into a prolonged and insidious bear market not unlike that of the late 1920s and 1930s -- complete with soup lines and apple- and pencil-selling vagabonds on every street corner. These predictions, however, would be wrong, according to a recent Government Accountability Office report. Boomers, says the GAO, will not sell their assets in such a way to cause any major, or minor for that matter, decline in stock and bond prices. The reasons are many and in some cases point to other and different problems that must be addressed. For one, boomers don't have any assets to sell, the GAO reports. And of the small minority of boomers that do own assets, it's unlikely that they will need to sell those stocks and bonds to fund their retirement. The top 5% of boomers control 52% of the financial assets held by their generation. What's more, the GAO notes that if present is prelude, the predictions of the pessimists will be way off base: Current retirees, for instance, presently spend down their money slowly and, in some cases, actually still manage to sock some money away. If boomers behave the same way, a rapid and large sell-off of financial assets appears unlikely, the GAO report states.... [but will the boomers be retiring at all?] -- Jim Devine / "Isn't it interesting that the same people who laugh at science fiction listen to weather forecasts and economists?" -- Kelvin Throop, III
