Stocks May Be Unscathed by Baby Boomer Retirees
The retirement of the baby-boom generation should not be a drag on stock prices, according to an analysis by Vanguard.
Vanguard researchers cited three key reasons why aging baby boomers won’t adversely affect the stock market. First, the baby-boom generation spans 19 years (birth dates of 1946 through 1964). Second, international ownership of U.S. stocks has been increasing. Third, historical data does not show a significant relationship between age and equity returns.
Though baby boomers are often grouped together, they will enter retirement over a prolonged period. The first baby boomers turned 65 in 2011 and the last won’t turn 65 until 2029. The length of the time-span implies any impact of their retirement on stock prices should occur gradually.
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