A study commissioned by the Retirement Income Institute earlier this year revealed that ‘peak boomers’ are generally not financially prepared for retirement. ‘Peak boomers’ are those born between 1959 to 1964, while baby boomers as a whole were born between 1946 to 1964.
“Based on their assets, two-thirds of peak boomers will be financially challenged in retirement,” the study said on page 3. “There also are large disparities in their assets based on gender, race and ethnicity, and education.”
This later subset of the baby boom generation, now entering their retirement age, is the largest by population size in recent years, as more of the earlier group has died off over time.
“From 2024 to 2030, the largest and final cohort of baby boomers—30.4 million ‘peak boomers’
in 2022, born from 1959 to 1964—will turn age 65,” the study said on page 3.
Many of them will heavily rely on their government for a living.
“35 percent of peak boomers will depend on Social Security for at least 90 percent of their retirement income at age 70 and 58 percent will depend on those checks for at least 50 percent of their income,” the study said on page 7.
Page 3 of the study also listed several financial facts about this generation subgroup which will complicate retirement for many peak boomers. These include lower than ideal asset valuations, reliance on government Social Security payments and pension coverage rates for just a quarter of the subgroup. There are also vast disparities in regards to education, gender and ethnic demographics.
Increases to government entitlement spending to pay for the peak boomer will total close to $347 billion by 2030, according to page 4 of the study.
The financial assets of the peak boomers are subject to market volatility and asset devaluations, as described on page 4. This is the case with stocks and bonds in the bear market of the Biden economy and collapsing dollar hegemony.
The change from a bull to bear market reduces these valuations (after withdrawing living expenses) from $224,200 to just $114,400. The changing market also reduces living expense withdrawals from $128,000 to just $72,300.
Peak boomer retirement is not alone in a vacuum either. Their absence from the labor force will increase costs to businesses which currently employ them, further raising the cost of products which the peak boomers will end up purchasing in their retirement, according to information on page 5. Replacement migration, a United Nations plan, is billed as a possible solution, although it should be noted that the replacements actually cost money.
Part of the lack of preparedness for retirement may partially come down to bad estimations on the prospective retiree’s part.
“While many peak boomers underestimate how soon they will retire, many also underestimate
how long they will live, which can undermine how financially prepared they are to retire,” the study said on page 5 and 6. “By underestimating how long they will live, many peak boomers may not recognize the value of the assured lifetime income streams provided by annuities.”
One notable point of interest not analyzed in the research is the phenomenon of stagflation, which is when there is inflation in the currency but no increase in earnings.
While inflation calculations were made in the research, they were based upon historical data. Unfortunately for the peak boomer, the economy is in unprecedented times.
De-dollarization (the act of foreign countries dropping the U.S. dollar for international trade) reduces the need for those countries to hold dollars and thus, the need to buy U.S. treasuries (U.S. debt).
While the U.S. has largely been able to offshore its inflation caused by money printing, the reduction of international purchases of its treasuries (debt instruments) will bring that inflation back home.
Money printing, however, seems necessary to pay the interest on the debt to the Federal Reserve for said money printing, fund government operations such as financing wars in places like Ukraine and Israel, entitlement programs to Americans, as well as paying for the retirement of the peak boomer.
Notably, entitlement programs accounted for over half of federal expenditures in 2023.
Reducing the amount of Americans would conceivably reduce that cost. It should be noted that the Covid vaccine reduces the population as well as being more popular among older demographics who take more from the government than they give.
Who is this iconic Boomer? pic.twitter.com/gDZ3xMxFu4
— Sean Seraphim Alexander Miller (@IWArchivist) October 2, 2024
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