When Baby-Boomers retire, how will it hurt investments for the generation behind them?

will the stock market crash when the peak of boomers retire

Public Comments

1. Not if it crashes before then. The housing bubble certainly has the potential of doing the job. We will have to see if we get over this hump first. Thanks to our totally incompetent U S government, there is every probability the the country will go bankrupt. I read in U S A Today recently that the current unfunded liabilities amount to over 1/2 million dollars for every person in the U S. Don't know whether that takes into account all the illegals or not. The article then said the the government was not worried about them. If they became a problem the government would just change the law and not pay them. Sounds reasonable to me.
2. When the boomers retire, there should be little to no impact on the investments for the next generation. The fact is most boomers don't have enough invested, and even if they did, they will not be able to pull it out of the market and stick it under the mattress. Most will become more conservative and take less risks with their investments, but will stay full invested in stocks, bonds and fixed income. As they draw down money from their investments to live on, travel, buy stuff for the grandkids, etc; this will continue to stimulate the economy and provide for a robust economy. ///
3. Good Question! What I currently see is some type of amnesty for illegals which will fill the void when the baby boomers retire. The more people paying into S. S. the longer it will work. Look for the American working population to rise way up if an immigration deal is worked out between Bush & Mexican President Foxx.
4. The American market might sure take a hit (unless it does so beforehand, as the other person suggested), as many of those baby boomers I'm guessing are holding mutual funds (which mostly invest in companies making up the Dow and the S&P). Their spendings will of course help boost companies' profits - but it remains to be seen whether that will be American companies or overseas ones. On the other hand, most analysts (myself included) expect inflation to rise and the Dollar to drop - this would have the effect of making the Dow artificially go up. Gold, oil, and the reserves of most countries are slowly going to Euros. But the biggest nail in the coffin is the national debt... America's ONLY hope for catching up on it is to devalue the Dollar. For now, at least, China's not about to let that happen (since most of that debt is owned by them)... but the moment they stop propping it up, look out below. Next time, dear Americans, vote more carefully..
5. It will be a drag on the market, but I don't think it will be enough to cause a crash. However, crashes will happen every so often, with or without the bay boomers retiring. See this Vanguard article:
6. No. Boomers like to hoard as well as spend. The social security obligations are something to worry about, however. The US can't keep selling bonds forever. If China sold all their bonds right now, the entire US bond market would collapse.