Thursday, September 20th, 2018

Good News: Boomer Wealth Not In Stocks


A lot of us boomers have bemoaned that our 401k is now a 201k, but a studymoney Good News: Boomer Wealth Not In Stocks finds that on the average only 15% of baby boomers wealth was in stocks.

A blog post by David Nicklaus of the St.Louis Post-Dispatch. A new National Bureau of Economic Research working paper, however, finds that fear to be vastly exaggerated. Three co-authors — two from Dartmouth and one from Texas Tech — look at portfolio data for 51- to 56-year-olds and estimate that just 15 percent of their total wealth was in stocks.

If that sounds low, consider that total wealth is a pretty broad term, including home equity and the present value of future Social Security benefits. Pensions and Social Security, in fact, account for roughly half of those Boomers’ total wealth. Here’s where the authors put stock-market losses in perspective:

Thus, a substantial and permanent decline in the stock market from its 2006 level means an average fall of several percentage points in average wealth. This loss is a significant one: percentage points of personal wealth should never be taken lightly. But it is not a life-changing loss for the average household.

What this indicates to me is that most baby boomers took the solid advice to be diversified in their investments. Most boomers do not look to their portfolios as the main source of their income for retirement.

Also, baby boomers unlike their parents do not look at retirement in the same way. Talk to most of my boomer friends and like me they will always work at something, whether it is making additional income or making a difference with full/part time volunteering.

Always Postive…

Boomer 54 Mark

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