Provided by the Business Insider, August 16, 2010:
News flash! America is rapidly graying, and many Baby Boomers have not saved enough for retirement.
Not only that, but the Baby Boom generation is literally threatening to the US economy, according to WSJ.
Basically the article is a run down of some daunting facts about the failure to save for retirement, the new era of thrift, and what the financial crisis has done to Boomers' saving.
As of 2008, those aged 65-74 were spending 12% less than folks in the same age group did in 2000 (granted, that was a bad year).
And if the stock market and bond markets continue on their current trajectories, then the aged are really in trouble:
At the same time, the return people can hope to earn on their assets has fallen, particularly for those who switch into bonds or annuities to guarantee a fixed income. The average yield on U.S. government, corporate and mortgage bonds stands at about 2.4%, while stock-market valuations suggest a long-term return of about 6%. At those levels of return, some 59% of people aged 56 to 62 will be at risk of not having enough money to cover basic living and health-care costs in retirement, estimates Mr. Van Derhei. If market returns are higher—8.9% for stocks and 6.3% for bonds—the picture isn't a lot better: The percentage at risk falls to about 47%.
So the other question is whether Boomers stick with their low yielding bonds (opting for a return of their money), or reach for stocks (in an attempt to get a return on their money).
Either way, as David Goldman notes, the gist is that boomers are shifting from goods to retirement instruments, and that is what the Journal is recognizing as a threat to the economy.
Mike Tendler, Director of The Tendler Group Design writes...
It doesn't have to be this way I may have a simple wealth creation solutions using a guaranteed rate of return and other formidably
long term or even short term tax deferred strategies .
Let's discuss your situation.........1-717-300-1455
News flash! America is rapidly graying, and many Baby Boomers have not saved enough for retirement.
Not only that, but the Baby Boom generation is literally threatening to the US economy, according to WSJ.
Basically the article is a run down of some daunting facts about the failure to save for retirement, the new era of thrift, and what the financial crisis has done to Boomers' saving.
As of 2008, those aged 65-74 were spending 12% less than folks in the same age group did in 2000 (granted, that was a bad year).
And if the stock market and bond markets continue on their current trajectories, then the aged are really in trouble:
At the same time, the return people can hope to earn on their assets has fallen, particularly for those who switch into bonds or annuities to guarantee a fixed income. The average yield on U.S. government, corporate and mortgage bonds stands at about 2.4%, while stock-market valuations suggest a long-term return of about 6%. At those levels of return, some 59% of people aged 56 to 62 will be at risk of not having enough money to cover basic living and health-care costs in retirement, estimates Mr. Van Derhei. If market returns are higher—8.9% for stocks and 6.3% for bonds—the picture isn't a lot better: The percentage at risk falls to about 47%.
So the other question is whether Boomers stick with their low yielding bonds (opting for a return of their money), or reach for stocks (in an attempt to get a return on their money).
Either way, as David Goldman notes, the gist is that boomers are shifting from goods to retirement instruments, and that is what the Journal is recognizing as a threat to the economy.
Mike Tendler, Director of The Tendler Group Design writes...
It doesn't have to be this way I may have a simple wealth creation solutions using a guaranteed rate of return and other formidably
long term or even short term tax deferred strategies .
Let's discuss your situation.........1-717-300-1455
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Not exactly. Bonds and money markets are at an all time low. I don't have a crystal ball but it seems college costs are rising a heck of alot faster than that of those stratagies and will continue to do so especailly now that the governmnet is talking over student loans. There is a great way to save for college costs that may suprise you. Remember, if your student does not attend college you may have a problem with a 529. I have an idea to share with you.....let's talk!