# Baby Boomer retirement - How big of a disaster? **URL:** \ **Category:** Great Debates\ **Created:** [August 21, 2006, 12:39am UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521 "2006-08-21T00:39:34Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Eve](https://avatars.discourse-cdn.com/v4/letter/e/9e8a1a/32.png) [@Eve](https://boards.straightdope.com/u/Eve)\ **Post date:** [August 22, 2006, 3:22pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/21 "2006-08-22T15:22:16Z")
[QUOTE=Triskadecamus] What, you want to shave your legs before you go? Tris [/QUOTE] Well, I do want to look nice when they find me! Besides, what if the mortician is a necrophiliac? ---
**Author:** ![newcrasher](https://avatars.discourse-cdn.com/v4/letter/n/b3f665/32.png) [@newcrasher](https://boards.straightdope.com/u/newcrasher)\ **Post date:** [August 23, 2006, 8:01pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/22 "2006-08-23T20:01:57Z")
[QUOTE=El\_Kabong] Well, I’ve got think that a lot of us have made our own beds, myself included. I’m going to be 53 in a couple of weeks. I wasn’t disciplined with my money when I was younger, and the outfit I’ve been mostly working for over the past 20 years didn’t even have a 401(k) plan, much less a pension scheme, until about 1996, so I didn’t really start saving until about 10 years ago. I’ve currently got about $40K in savings which, while above the average cited by the OP, is pretty much a drop in the bucket. If everything goes right, my savings realistically are likely to total no more than $70-85K by age 65. I’m buying a modest house within the next couple of months, which will put me about halfway through the mortgage term when I reach ‘retirement’ age, and thus leave some possibility of paying it off at that point. Like others have mentioned, however, I have no realistic expectation of actually retiring around age 65. Firstly, all the above assumes that I maintain my current position and income straight through to retirement, a questionable assumption in this culture that more and more seems to want to throw away all its workers above the age of 50. Even if all goes well, I don’t currently see any scenario, except an early demise, that would allow me to live comfortably on SS alone, or on a combination of SS and my retirement savings. I’m not complaining, however; as I said at the outset, it’s in part my own damn fault. OTOH, what I will complain about is the somewhat shitty situation my parents were left in. My father paid into a classic big-industry pension scheme, with lifetime medical benefits, while slaving away for close to thirty years, then was more or less forced into an early retirement by layoffs. When he died, his pension, which now goes to my mother, was cut in half, and soon afterward the company he had worked for went bankrupt, and everyone on company pensions was unceremoniously dumped out of their ‘lifetime’ medical plans. Currently her kids, myself included, kick in a bit each month to keep her from having to live on cat food, but it was a real wake-up call. I’ve always been single and there won’t be any kids to bail me out, so I’d better be at least a little smart with my money over the next few years. What have learned from all this? I tell everyone who will listen that you’ve got to start saving as soon as you start working, that you should save as much as you can afford, and that you should control your retirement investments. OK, I’ll stop rambling now. [/QUOTE] Investing $30-$50 in a life insurance plan would have enabled your father to leave your mother in a very nice situation. Get. Life. Insurance… ---
**Author:** ![Hampshire](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hampshire/32/4887_2.png) [@Hampshire](https://boards.straightdope.com/u/Hampshire)\ **Post date:** [August 23, 2006, 8:19pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/23 "2006-08-23T20:19:42Z")
I fear for my generation X. A handfull of us are putting money away into 401Ks and IRAs but I know just way too many people that have no savings what-so-ever and are up to their ears in debt. And they’re in their 30s!! In debt holes that they can’t climb out of. So when they all get too old to work and need health care and I’m retired and set I don’t forsee them all becoming homeless. I forsee them pushing the government to take care of them. And they’ll find a way to take from the people who did manage to plan ahead and save. ---
**Author:** ![newcrasher](https://avatars.discourse-cdn.com/v4/letter/n/b3f665/32.png) [@newcrasher](https://boards.straightdope.com/u/newcrasher)\ **Post date:** [August 23, 2006, 9:16pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/24 "2006-08-23T21:16:01Z")
[QUOTE=newcrasher] Investing $30-$50 in a life insurance plan would have enabled your father to leave your mother in a very nice situation. Get. Life. Insurance… [/QUOTE] PER MONTH ---
**Author:** ![El\_Kabong](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/el_kabong/32/496_2.png) [@El\_Kabong](https://boards.straightdope.com/u/El_Kabong)\ **Post date:** [August 23, 2006, 9:20pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/25 "2006-08-23T21:20:17Z")
[QUOTE=newcrasher] Investing $30-$50 in a life insurance plan would have enabled your father to leave your mother in a very nice situation. Get. Life. Insurance… [/QUOTE] My father was pretty much the poster boy for bad financial decisions, but he passed in 2001, so all that’s moot now. ---
**Author:** ![Cyberhwk](https://avatars.discourse-cdn.com/v4/letter/c/7993a0/32.png) [@Cyberhwk](https://boards.straightdope.com/u/Cyberhwk)\ **Post date:** [August 24, 2006, 10:32am UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/26 "2006-08-24T10:32:31Z")
As a 20-something who has just paid off a lot of debt and is starting to save for the future, how big of a hit might the market take when the boomers move out? Should I be looking to invest heavy in bonds and other investments with gaurenteed growth or will the cashing out be slow enough that I’ll be alright? ---
**Author:** ![FRDE](https://avatars.discourse-cdn.com/v4/letter/f/e68b1a/32.png) [@FRDE](https://boards.straightdope.com/u/FRDE)\ **Post date:** [August 24, 2006, 10:54am UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/27 "2006-08-24T10:54:30Z")
[QUOTE=Cyberhwk] As a 20-something who has just paid off a lot of debt and is starting to save for the future, how big of a hit might the market take when the boomers move out? Should I be looking to invest heavy in bonds and other investments with gaurenteed growth or will the cashing out be slow enough that I’ll be alright? [/QUOTE] If I were you I would invest in your own property first, then something to rent out. Paying someone else to look after your money makes little sense to me. Obviously keep a cash buffer in case of (employment) problems. ---
**Author:** ![Common\_Tater](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/common_tater/32/13846_2.png) [@Common\_Tater](https://boards.straightdope.com/u/Common_Tater)\ **Post date:** [August 24, 2006, 10:56am UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/28 "2006-08-24T10:56:49Z")
A 20 something is in good shape provided you are prescient and disciplined enough to start saving and investing now. Time is on your side in that instance. That’s always the number one lament it seems. ---
**Author:** ![Kalhoun](https://avatars.discourse-cdn.com/v4/letter/k/3bc359/32.png) [@Kalhoun](https://boards.straightdope.com/u/Kalhoun)\ **Post date:** [August 24, 2006, 11:05am UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/29 "2006-08-24T11:05:37Z")
[QUOTE=Eve] My retirement plan is “a handful of sleeping pills and a razor blade.” [/QUOTE] I love it when you’re dark and cynical. 🆒 I have a retirement plan, of sorts. I plan to live modestly until such time as I contract a horrid disease or become physically incapacitated. This news will trigger the “pillow pact”, which isn’t actually done with a pillow, but will be more along the lines of “a handful of sleeping pills and a razor blade.” ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [August 24, 2006, 2:45pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/30 "2006-08-24T14:45:02Z")
I read a very good book called [“Smoke and Mirrors: Financial Myths That Will Ruin Your Retirement”](http://www.pubgouv.com/finance/smoke_mirrors.htm) that I would recommend to anyone concerned with debt and retirement (it’s a Canadian book, but the advice is sound for anyone). One of the myths it explores is the myth that you need a million dollars to retire. It makes it clear that the banks and financial planners that work on commission aren’t our friends. ---
**Author:** ![Cemetery\_Savior](https://avatars.discourse-cdn.com/v4/letter/c/439d5e/32.png) [@Cemetery\_Savior](https://boards.straightdope.com/u/Cemetery_Savior)\ **Post date:** [August 24, 2006, 5:43pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/31 "2006-08-24T17:43:28Z")
[QUOTE=DrDeth] [Two peices of free advcie. I]Max out your 401K plans, \* Fergawdssakes, at least to the amount of matching and I’d ay no less than 10%, even if no matching. A Maxed out 401K converted to an annuity… [/QUOTE] I agree with your first point, at least up to the match…_provided you have a decent portfolio to choose from_. If you have crappy choices (and believe me, there are a LOT of bad mutual funds out there now), max out your company match, and divert the money to a well-performing fund (based upon age and risk tolerance, but err on the side of higher-performing). If you can get around 10%, then you’ll roughly have outpaced the tax savings and the projected returns from your crappy funds. Having said that, if you have a great fund selection (covering all 9 flavors!), then max out to 10% or your dollar limit. Don’t forget catch-up contributions if you’re of age. And please be careful of anuities. There are SO many variables in the plans. combine that with the VERY loose regulation of that industry, and it’s a shyster’s paradise. -Cem ---
**Author:** ![Cemetery\_Savior](https://avatars.discourse-cdn.com/v4/letter/c/439d5e/32.png) [@Cemetery\_Savior](https://boards.straightdope.com/u/Cemetery_Savior)\ **Post date:** [August 24, 2006, 5:52pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/32 "2006-08-24T17:52:21Z")
[QUOTE=Cyberhwk] As a 20-something who has just paid off a lot of debt and is starting to save for the future, how big of a hit might the market take when the boomers move out? Should I be looking to invest heavy in bonds and other investments with gaurenteed growth or will the cashing out be slow enough that I’ll be alright? [/QUOTE] If you could time the market, you’d be a zillionaire, so don’t try it. Having said that, when the Boomers start divesting their securities, it’s a great opportunity to buy low (as I too believe the market will dip). Keep that in mind. This is all a moot point once they start handing out the immortality pills from Area 51, however. -Cem ---
**Author:** ![Triskadecamus](https://avatars.discourse-cdn.com/v4/letter/t/b19c9b/32.png) [@Triskadecamus](https://boards.straightdope.com/u/Triskadecamus)\ **Post date:** [August 24, 2006, 6:00pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/33 "2006-08-24T18:00:35Z")
[QUOTE=Eve] . . . Besides, what if the mortician is a necrophiliac? [/QUOTE] I think this raises the bar on being considerate to others to a level previously beyond all consideration! Tris ---
**Author:** ![spazattak](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@spazattak](https://boards.straightdope.com/u/spazattak)\ **Post date:** [August 24, 2006, 8:05pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/34 "2006-08-24T20:05:38Z")
[QUOTE=Common Tater] What is the effect of millions of boomers drawing down their equities from the markets en masse? The only possible outcome that I can envision is the market tanks for a long time. Of course markets don’t work that way - otherwise, perhaps shorting the entire index would be a “foolproof” way to profit. But still… [/QUOTE] My parents intend to live off the earnings of their portfolios. There won’t be any mad selling-off from folks like these. If having money in the market is what got them this far over the last 20-40 years, why dump it all into low-risk low-yield when they can live more comfortably and give something to their kids when they die if they just keep it in the market? ---
**Author:** ![Maeglin](https://avatars.discourse-cdn.com/v4/letter/m/8baadc/32.png) [@Maeglin](https://boards.straightdope.com/u/Maeglin)\ **Post date:** [August 24, 2006, 10:53pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/35 "2006-08-24T22:53:22Z")
[QUOTE=Common Tater] What is the effect of millions of boomers drawing down their equities from the markets en masse? The only possible outcome that I can envision is the market tanks for a long time. Of course markets don’t work that way - otherwise, perhaps shorting the entire index would be a “foolproof” way to profit. But still… [/QUOTE] Boomers presumably aren’t drawing down on equity to buy crack or to flush it down the toilet. They purchase products and services, whose production must be financed, and capital will be required to fill this gap. I am 28, and have no debt save my mortgage and my student loans. When the boomers start retiring, I imagine that my own career will be accelerated further. ---
**Author:** ![Common\_Tater](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/common_tater/32/13846_2.png) [@Common\_Tater](https://boards.straightdope.com/u/Common_Tater)\ **Post date:** [August 25, 2006, 2:32am UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/36 "2006-08-25T02:32:23Z")
I didn’t mean to imply that all the boomers would “sell the market” (and I apologize for anyone who took it that way) at the same time, only the theory that the general direction for monies for a huge demographic would be trending the other way, as we’ve had some serious coin shoveled into the markets for some years now. However if markets were that simple, I’d be a rich man. Most of the sensible (for most of us) investment advice centers around a diversified portfolio of carefully selected stocks, bonds, indexed mutual funds, real estate, etc. etc, in a “buy and hold” strategy is the safest and most dependable way to preserve and grow wealth, but a thorough understanding coupled with the discipline to make it work is the key. I don’t claim to have that, yet. The stock market is actually among the safest investments in the long run (25 years +) and Keynes can go to hell. Equities are also the only dependable way to offset the ravages of inflation. I remember during the [dot.com](http://dot.com) boom of the 90’s, everyone was just throwing their lunch money at mutuals and they were going up, up. Impossible nearly, not to make money - I was in a social situation with one of my bosses where it seemed imprudent to “correct” someone. Being “correct” might be nice, but can also mean being very lonely, or fired even, who knows. But he proceeded to give me the standard “you’ve got to prepare for your future/retirement”, so I smiled and nodded. At one point he trotted out some figures and had obviously shifted a decimal somewhere along the line, and kept referring to these quite respectable returns as “interest”. Hm, it’s just a peeve of mine. I’m no whip with a pencil, but I know percentages, and basic addition and subraction, amortisation. When I allowed that certain companies hadn’t yet shown a profit, and were somewhat cagey on what it was they actually did “We are a trans-disciplinary organization providing a myriad of structured systems… etc” with an infinite P/E ratio, this guy actually sez: “This time it’s different” Not everyone wants to buy dogfood over the internet, but the companies that struggle through and persevere are still around, and the internet isn’t going away. More than a few of those stocks that cratered might be worth hanging onto, assuming they were legitimate concerns to begin with. What is different, a lot more families are stakeholders in the market compared with a few generations ago, which is a good thing. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [August 25, 2006, 3:18am UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/37 "2006-08-25T03:18:05Z")
Off-topic, but whenever I think about the Boomers retiring, I envision the common rooms of thousands of retirement homes being filled with pot smoke and Hendrix music . . . ---
**Author:** ![MsRobyn](https://avatars.discourse-cdn.com/v4/letter/m/90ced4/32.png) [@MsRobyn](https://boards.straightdope.com/u/MsRobyn)\ **Post date:** [August 25, 2006, 9:31am UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/38 "2006-08-25T09:31:01Z")
[QUOTE=Maeglin] I am 28, and have no debt save my mortgage and my student loans. When the boomers start retiring, I imagine that my own career will be accelerated further. [/QUOTE] From a simple demographics perspective, that seems to be the case. Baby Boomers aren’t retiring in large numbers yet, and when they do in the next five to ten years or so, there aren’t a whole lot of Gen X’ers to replace them. For the moment, however, there is basically a ceiling effect, at least for younger workers. (There is an article [here](http://money.cnn.com/magazines/fortune/fortune_archive/2006/08/21/8383654/index.htm) about that.) Robin ---
**Author:** ![Eve](https://avatars.discourse-cdn.com/v4/letter/e/9e8a1a/32.png) [@Eve](https://boards.straightdope.com/u/Eve)\ **Post date:** [August 25, 2006, 1:05pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/39 "2006-08-25T13:05:42Z")
[QUOTE=BrainGlutton] Off-topic, but whenever I think about the Boomers retiring, I envision the common rooms of thousands of retirement homes being filled with pot smoke and Hendrix music . . . [/QUOTE] They can really screw with us by playing Donna Summers’ “Last Dance” and watch us all desperately try to write our phone numbers on cocktail napkins. ---
**Author:** ![Triskadecamus](https://avatars.discourse-cdn.com/v4/letter/t/b19c9b/32.png) [@Triskadecamus](https://boards.straightdope.com/u/Triskadecamus)\ **Post date:** [August 25, 2006, 1:34pm UTC](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521/40 "2006-08-25T13:34:06Z")
We can’t get in and out of beanbag chairs anymore. [Previous page](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521.md?page=1) [Next page](https://boards.straightdope.com/t/baby-boomer-retirement-how-big-of-a-disaster/369521.md?page=3)