I’ve been writing about the effect of the retirement of the 80 million baby boomers on the economy.
One question that might arise is, what about pensions?
Despite what we say in the news, pensions are still valid. Nearly half – 46% – of Americans are currently covered by pensions. Of course, this is not the higher percentage that was once common, but it is not zero either. Pensions are a meaningful component of expected retirement income for many workers today.
For comparison, do half of all middle-aged folks expect Social Security to contribute significantly to their retirement? Recent polling suggests the answer is “No”, but I will discuss that in another blog, another day.
If so many people rely on pensions, is it a big deal for the stock market? The answer is a resounding “YES!”.
Retirement and Pensions funds currently account for over 40% of all American common stock.
Read that last part again. Nearly half of our common stock is tied up with a single expectation – to fund the retirements – principally that of the baby boomers.
Think about that when you attend your next retirement party.
[ This blog has been an outgrowth of work I've done as a computational modeler, applying my expertise to answer the question of what the boomers will do to the stock market, as well as discussions based on current-day events. For more information, visit http://www.thecomingcrashonline.com, or read the book "The Coming Crash: How a House of Cards Will Fall as We Pull Out the Foundation." ]
