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 ID: 636767
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Slide1
Baby Boom
By: Group 7Slide2
What is the Baby Boom?
People born from 1946 to 1964
Huge increase in birth rate
Cause by return of WWII SoldersSlide3
Population ChangeSlide4
Major Risks faced by baby boomers
Not financially ready for retirement
Social security is underfunded
Stock Market problemsSlide5
Changing the Workforce
Average retirement ages is about 65
Baby Boomers are starting to leave
Businesses losing skillsSlide6
WorkforceSlide7
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?Slide8
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?Slide9
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 FaultSlide10
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.pdfSlide11
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 FundsSlide12
Best/Worse
Generation 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 onSlide13
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 oldSlide14
Social Security
Government program
Helps those who are unable to work
Started in 1935 with the New Deal
Today, $ 192,560
In 2050, $254,736Slide15
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.Slide16
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.Slide17
Conclusion
Baby 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 SecuritySlide18
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