The U.S. Government Accountability Office released a report “predicting the possible effects of the retirement of the baby boomers on investment returns.” Some of the worry of a market slump stems from baby boomers “shifting assets into more conservative investments and converting assets into income.”
The GAO conducted 13 academic simulations of potential outcomes when baby boomers retire. Here are some reasons there might not be a market downturn because of the retirement of baby boomers:
- Boomers plan to work longer and start drawing on retirement income later.
- Boomers are expecting to live longer and may try to keep more assets in their nest eggs.
- The few boomers who have significant investments can pay their living expenses by selling just a small portion of their investments.
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