Consider the following scenario: You have worked your entire life. Now, you’ve reached the age of retirement. Let’s say, you have $400k saved for retirement. Will you up your spending? Or will you collapse it to make the money last as long as possible?
Great coverage on the demand side, is the supply side question just: how effectively can globalization replace losses in the local workforce? And then the balance between the two is just the change in inflation.
That's true for the day to day spending and for luxury, but he forgot huge amounts for medical expenses and health care! And not all is covered from savings - besides pensions there is a lot of wealthfare/social transfers...
Spot on! I'm a retired boomer who could afford to spend like I did while working but instead have become very conservative in my spending habits due to a very real possibility of huge medical expenses and health care needs.
Perhaps the concern about retiring boomers is their contribution to productivity. Aquiring skills over severeal decades make them more productive than for example Millennials. Our concern should be with retiring boomers and and an increasing share of millenial workforce. Exactly what transpired in the 1970’s when boomers entered the workforce without enough skills to counter rising costs.
Great coverage on the demand side, is the supply side question just: how effectively can globalization replace losses in the local workforce? And then the balance between the two is just the change in inflation.
Brilliant as always thanks for the email 📧 via LinkedIn 👍
Nice write up.
One quibble: you state “Assuming the Baby Boomers are now around 70, they must plan to live for another 12 years on average.” This is inaccurate.
For example, a couple at age 65 has a 50% chance that one of them will still be alive at age 89. Reference https://www.kitces.com/blog/life-expectancy-assumptions-in-retirement-plans-singles-couples-and-survivors/
Of course, this strengthens your argument.
That's true for the day to day spending and for luxury, but he forgot huge amounts for medical expenses and health care! And not all is covered from savings - besides pensions there is a lot of wealthfare/social transfers...
Hi Raoul, will this be valid if you consider countries like Australia or Malaysia?
Spot on! I'm a retired boomer who could afford to spend like I did while working but instead have become very conservative in my spending habits due to a very real possibility of huge medical expenses and health care needs.
Paul Hodges yesterday's post is about JP. He hopes for a global debt jubilee:
Asia’s debt crisis starts to approach its endgame as the yen continues to tumble
https://bit.ly/49aYgf9
Perhaps the concern about retiring boomers is their contribution to productivity. Aquiring skills over severeal decades make them more productive than for example Millennials. Our concern should be with retiring boomers and and an increasing share of millenial workforce. Exactly what transpired in the 1970’s when boomers entered the workforce without enough skills to counter rising costs.