Lately, the path to retirement (and even being in the midst of it) has been rocky for many. To help afford one’s Golden Years, there’s a possibility that many baby boomers will have to liquidate a significant percentage of their 401Ks from the market within the decade. Finance buffs took to the internet to share what they think will happen if that’s true.
Note: Some quotes in this piece have been lightly edited for grammar.
You Won’t Even Notice
One investor believes that the boomers will take their minimum withdrawals, and that’s it. Another person agrees. “No one would even notice,” they say, pointing to data that shows the real changemakers in the market are institutional investors that own about 80% of all stock in the S&P 500.
Pass It On
Even if boomers take their investments out of the stock market, “they won’t be buried with it, I don’t think,” ponders a realist. They think a more likely situation is boomers will pass away and give the money to their kids, who then invest it right back in the market.
“Boomers have less money in the market than you think,” one person reminded the audience. They also urged people to remember that pensions and 401Ks weren’t a big deal when boomers started working. “Most of their money is in their homes, not in investment accounts.”
No need to guess what happens; we’ve already been there for a while, according to someone with an eye for the stock market. “A significant portion has been retired for a long time already,” they said. “The market you see now is what happens when they are withdrawing their funds.”
One person thinks there’s no way a large percentage of boomers will make their withdrawals at the same time for us to find out. “In a similar way that people generally don’t withdraw their savings all at the same time,” they said.
Can’t Fathom It
One boomer spoke for themselves and said they’ve been taking small withdrawals each month, but nothing major. “Will probably double next year if my wife retires,” they said. “Pulling out a large amount of money from the market would be ridiculous.”
Another person says they have a frugal boomer mother who’s holding on tight to their money and not letting go. She’s even let her home fall into disrepair to avoid spending. “I don’t know what the thought process is, but at this rate, her savings will probably just go back to the bank and help nobody, including herself.”
One person thinks boomers’ retirement spending habits will lead to extra money floating around. “There may be so much extra money from all the social security checks that the Fed will have to keep rates high to slurp it up to prevent high inflation.”
All in the Family
“Those that have enough money to make this an issue won’t spend enough money to make this an issue,” another person said. They agree with the sentiment that, most likely, boomers will pass their wealth down the family line.
An optimistic commenter observed that even if boomers take money out of the market, most likely, they’re withdrawing to spend it at publicly listed companies, putting the money back in rotation anyway.
Bye Bye Buyers
Boomers are well known for their mass consumption, and more than taking their money out of the market, one person is concerned with what’ll happen when their spending stops. “Could cause shortages and limited real economic growth.”
Tale as Old as Time
“Do you think that every year fewer people work and more people retire?” said one frustrated commenter, who’s tired of hearing the same argument. “Your ‘end of days’ situation happens every single year. And has since forever. It’s called ‘aging’.”
One person thinks that boomers don’t use the internet enough to coordinate a mass withdrawal. “Facebook disagrees,” another commenter replied.
Too Bad, Kids
Not everyone agrees with those who think boomers will be generous with their earnings, even to family. “They’re not giving these kids anything,” warns a Debbie Downer. “They’re going to spend it on cruises and long-term care.”
Out of Cash
One sardonic commenter thought it was bold of the original poster to assume boomers have the money to spare. “Half of them have ZERO,” they said. “They’ve screwed up everything else, why not screw up their retirement too?”
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