When we baby-boomers retire. . .

Finally an article that addresses what I had been wondering about. We know that the Social Security system will be in big trouble when we baby-boomers retire. But what will happen to the stock market once we all sell off our IRAs to fund our golden-year lifestyles? Won’t all those sell orders flood the market and drive the prices down, thus leaving us old-timers with less money after all, despite all that saving and investing? The linked article acknowledges the problem, but offers some hope.

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • EconJeff

    That’s an interesting piece. One thing I don’t recall seeing there, though, is the fact that participation in 401(k) accounts (and similar accounts) has been increasing among the young, so there are also more non-immigrant investors (or more non-immigrant investor’s dollars) which can soak up some of the sell offs.

  • http://www.cockahoop.com/ tODD

    “We know that the Social Security system will be in big trouble when we baby-boomers retire.” Actually, we don’t know that. Current estimates — that is, if nothing were to change from how it is now — have the system paying full benefits for at least 40 years. Most boomers will be dead by then.

    That isn’t to say that the system doesn’t need to be adjusted (lifting the cap or adjusting some rates), but these needn’t be massive overhauls of the whole system.

  • EconJeff

    In 2017 the more money will be being paid out than the system will be taking in. There is no “lock box”; the so-called “trust fund” has been completely raided by the government. So, starting in 10 years, not 40, there the US will need to find some way to pay promised benefits.

    If the SS system doesn’t change (increase taxes/cut benefits) then the money will need to be repaid to the “trust fund” from general revenues. Which is just a fancy way of saying that either the US will need to borrow more money–a lot more–or will need to raise taxes.

    The longer we wait to make the necessary adjustments to the system, the more massive the changes will need to be.

  • Paul

    Baby boomers don’t realize that it won’t be long until they no longer have a ‘lock’ on keeping Social Security as it is once they are no longer in the majority of Voters. Eventually, they will become a minority. If I were in their shoes, I would fix Social Security now in a way that they can live with, or the ones they expect to pay for them will fix it in a way that will hurt them badly. I’m 42 and among the first of the Baby Busters. Most of my contemporaries want means testing for everyone beginning immediately. Keep Social Security as a safety net but cut off those who don’t need it. In just 10 years, the Boomers will be ages 52 – 72 which means that there will be 34 years of voters younger than them who are seeing their grandparents and great grandparents not only having all the wealth but eating up their income too. Let them spend their 401k’s and let us keep our incomes, but they can’t have both once there’s enough of us to change it. Grandma needs help? Fine! But if not, then don’t put us in the poor house. I don’t think they realize the growing antagonism that generations after them have toward their hedonism. Now that’s something to think about.

  • http://www.LutheranLucciola.blogspot.com Lutheran Lucciola

    My generation indeed has the distaste for the boomers…..not as individuals, but as a whole. We could list all the reasons why, but it would take the entire Internet bandwith.

    The boomer legacy is not a good one.

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