Baby BoomBy: Group 7

What is the Baby Boom?People born from 1946 to 1964

Huge increase in birth rate

Cause by return of WWII Solders

Population Change

Major Risks faced by baby boomers

Not financially ready for retirement

Social security is underfunded

Stock Market problems

Changing the WorkforceAverage retirement ages is about 65

Baby Boomers are starting to leave

Businesses losing skills

Workforce

What’s the impact of their retirement?

Baby boomers start to leave the workforce, leaving less people to work for the society

America’s elderly are living longer and the cost of health care is ring dramatically. Two factors that make it expensive to take care of these retiring baby boomers

There is a risk that the next generation will not get enough social security

Baby boomers are taking their money out of the market, which makes the market unsteady?

Not Financially ready for retirement

Most baby boomer are ill-prepared for their retirement

According to one recent survey, 36 percent of Americans say that they don’t contribute anything at all to retirement savings.

Their home equity was destroyed by recent financial crisis

401ks were devastated when the stock market tanked

Over 30 percent of U.S. investors currently in their sixties have more than 80% of their 401k invested in equities.  So what happens if the stock market crashes again?

Not Financially ready for retirement

Their home equity was destroyed by recent financial crisis

401ks were devastated when the stock market tanked

Over 30 percent of U.S. investors currently in their sixties have more than 80% of their 401k invested in equities.  So what happens if the stock market crashes again?

The combination of inflation and taxation significantly erodes retirement savings and income.

FACT BRIEFING: Boomers Generous to a Fault

FACT BRIEFING: Boomers Generous to a Fault

Findings from the Ameriprise Financial Money Across Generations® study.

three generations--parents of baby boomers, boomers themselves, and boomers’ adult children

http://www.ameriprise.com/global/docs/pr-fact-sheet-platform.pdf

Threat to Stock Market?As Boomers retire, they will liquidize assets to

create an income? The wealthiest 10% of the boomers own 2/3 of the

boomer’s financial assets These people will not need to pull out assets to pay for

retirement Since they entered the workforce in 1971, the fund

industry increased from $55 billion to $10.7 trillion. 42% of that is invested in US Stock Funds

Best/WorseGeneration Y start

replacing exiting boomers in the stock market

Current low interest rates slow shift

Largest portfolios concerned more with passing on wealth

• Dramatically conservative asset allocation

• Baby Boomers shift to income-oriented investments

• The stock market’s long dry spell drags on

Life Expectancy In 1935, it was 61.7 years old

Today, it is 78.8 years old

In 2050, it is projected to be 83.3 years old

Social SecurityGovernment program

Helps those who are unable to work

Started in 1935 with the New Deal

Today, $ 192,560

In 2050, $254,736

Social Security is underfund

The federal government has already begun to pay out more in Social Security benefits than they are taking in

35% of Americans already over the age of 65 rely almost entirely on Social Security payments alone.

Approximately 3 out of 4 Americans start claiming Social Security the moment they are eligible at age 62.

Social Security is underfund

In 1950, each retiree's Social Security benefit was paid for by 16 U.S. workers.  In 2010, each retiree's Social Security benefit is paid for by approximately 3.3 U.S. workers.  By 2025, it is projected that will be approximately two U.S. workers for each retiree.

ConclusionBaby Boomers are not financially ready for

retirement

Social Security is underfunded

The Baby Boom will be leaving the workforce creating openings

Life expectancy and average years in retirement is constantly growing, putting even more strain on Social Security

How will this affect us?Unemployment rate may decrease

Social Security will be strained and may not even exist as we grow older

Or… we may be required to pay even more money into Social Security

Since the Baby Boom is comprised of many of our parents, we may be required to support them since many are not financially ready