Baby Boomers Cause “Meltdown?”
As soothsayers and strategists gaze into 2010, one statistic on the retiring baby-boom generation makes anxious reading for stock market bulls, according to Reuters news service.
The share of the U.S. population aged between 40 and 65, when people typically prepare for retirement by building their biggest pile of financial assets, peaks in 2010 and this ratio has shown an uncanny link with real equity prices for 40 years.
In snapshot, 78 million Americans were born between 1946 and 1964 and by the mid-1980s earned half of U.S. personal income.
This outsize population cohort, swollen by global baby booms as World War Two ended in 1945, is typical.
The proportion of the global population over 60 is set to double by 2050 to 21.8 percent. As birth rates fall and people live longer, ratios of retirees per worker is likely to soar.
Yet the U.S. ratio of those in prime savings years to the sum of under-40s plus those 65 and over is marked by a glaring market correlation and an obvious 2010 milestone.
Filed Under: Baby Boomers
