UnThreaded | Threaded | Whole Thread (33) | Ignore Thread Prev Thread | Next Thread
Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Boomers and their breaking of the market Date: 8/8/2006 3:36 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
There was a story posted a few days ago from WSJ about how Boomers will not break the market because they have few stocks. I questioned that assessment based mostly on my anecdotal experience.

Today I read this from one of my investment sources:

78.2 million baby boomers (1)

2.55 trillion in defined-contribution plans and another 3.48 trillion in IRAs (2)

194 billion was rolled over into IRAs in 2005 (3)

The average IRA rollover was 125k last year (3)

(1) US Census Bureau
(2) Employee Benefit Research Institute
(3) Cerulli Associates

Considering that the longer you work, the greater chance you have to accumulate assets, I think it fair to assume that the lion's share of the money in D-T plans (as well as D-P plans) and rolled IRAs are in the hands of those age 50 and older. I have read a number of sources over the last few years that estimate anywhere from 1 to 3 trillion in assets will exchange hands over the next two decades due to the retirement of boomers. That will certainly have some sort of financial impact - positive, negative, or neutral.
Print the post Back To Top
Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53017 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/8/2006 5:15 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
I have read a number of sources over the last few years that estimate anywhere from 1 to 3 trillion in assets will exchange hands over the next two decades due to the retirement of boomers. That will certainly have some sort of financial impact - positive, negative, or neutral.

Fair analysis, but:

1. Most boomers won't be able to fully retire at 65, so the sell off period will be extended;

2. The vast majority of funds aren't now in the stock market. Much too much of savings is in CD's and Bonds;

3. Just as dividends went out of favor during the go-go years, they are making a resurgence now as boomers near retirement and I'll bet they begin to compete with treasuries. I think you'll also see a higher guarantee and interest rate on corporate bonds.

4. This all means that there will be a "flight to quality" that may result in a new round of acquisitions and mergers. I think you'll find the toughest area to raise money will be in new business ideas (which is NOT a good thing).

So I agree with the premise of a slowdown, not a meltdown. I would have felt even better if the Bush social security plan had been given a shot (but I understand why it failed), but even so a lot of Gen X'rs and especially Millennials are a LOT more serious about saving/investing that we boomers.

Hockeypop


Print the post Back To Top
Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53018 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/8/2006 5:24 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
1. Most boomers won't be able to fully retire at 65, so the sell off period will be extended;

While I don't necessarily agree with the predicted retirement age (at least in regards to retirement from their current fulltime job), I do agree that the sell-off will be extended and likely have no significant negative impact.

2. The vast majority of funds aren't now in the stock market. Much too much of savings is in CD's and Bonds;

Not per the information I posted. I agree that many keep way too much in savings (I see it every day) but the trillions in defined comp plans are in 401ks and 403bs, not a savings account.

Since this is the first year the boomers turned 60, I will be very interested to see what happens over the next 6-7 years as they hit 65 and become eligible for medicare (which is why I think many will retire by that age - no need to keep working for insurance coverage).

Print the post Back To Top
Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53019 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/8/2006 5:46 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
Not per the information I posted. I agree that many keep way too much in savings (I see it every day) but the trillions in defined comp plans are in 401ks and 403bs, not a savings account.

You posted the total in 401Ks and 403Bs, but that's not the amount by boomers alone, right?

You then made the assumption that the majority must be boomers because they had more time to collect, but that's far from guaranteed logic, because:
1) these plans haven't been around for the full length of most boomer's careers
2) the limits for these plans were substantially lower for a long portion of boomers careers
3) there's worry about the going forward economy because most boomers haven't saved up substantial assets for retirement. Isn't the stat that the averge 60 year old has like $50K or $100K or something?



Print the post Back To Top
Author: IndecisiveFool Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53020 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/8/2006 5:59 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
Not per the information I posted. I agree that many keep way too much in savings (I see it every day) but the trillions in defined comp plans are in 401ks and 403bs, not a savings account.

Our 401k administrator lists how much assets are invested in each option. After an index fund, the second largest amount was in bank investment contracts.

IF

Print the post Back To Top
Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53021 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/8/2006 6:16 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
So I agree with the premise of a slowdown, not a meltdown. I would have felt even better if the Bush social security plan had been given a shot (but I understand why it failed), but even so a lot of Gen X'rs and especially Millennials are a LOT more serious about saving/investing that we boomers.

I'm 22, and many of my friends don't save/want to/understand why they should. All through high school and college people would spend all their money that they made. Perhaps once they are out of college for more than a few months (we graduated last May) they will start realizing that its expensive to live when its not on mom and dad's dime (I'm just as guilty, but I at least managed my bills, my parents would give me a chunk of money at the beginning of each semester, so I was forced to budget or go without food by Halloween). My roommate whose lifestyle is very expensive is finally realizing this (he just found out he might be going from a $55,000 job he found out he hated to a less than $30,000 job he will love, but won't be able to live on).

WRJ

Print the post Back To Top
Author: SirTas Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53022 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/8/2006 6:29 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
The Boomer impact will be cushioned by the fact that they will be selling not all at once but over a long time--decades? (What's the cut-off point for Boomers?) First of all, each individual Boomer will sell over a period of many years, and also the entire generation will sell over a long time (here's where my decades guess comes in.) Some will live to be 100 and will sell over 30 years. Some will die early and in fact pass equities on to their heirs. Some will hit 60 soon--but for others that's still a long way off. Then too, some simply haven't saved so much that their selling it will have that much of an effect. Some will continue to work.

IF they had all been good savers, and IF they were all retiring on a regular basis, then there would be a significant impact. But I don't think there will be a significant impact.

--SirTas

Print the post Back To Top
Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53023 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/8/2006 7:10 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
but even so a lot of Gen X'rs and especially Millennials are a LOT more serious about saving/investing that we boomers.

Oh, baloney.

In the 1920's, about half of the "retiring" population had no savings.

In the 1950's, about half of the retiring population had no savings.

At last report, in the 1990's about half the retiring population had no savings (and will rely on Social Security for all of their "post retirement" income.)

If the GenX'rs and Mllenials are "a LOT more serious about saving" then why are they the marketeers dream target? (Hint: because they overspend on "brands", and do not save - any more than their parents, or their parents parents did.)
 


Print the post Back To Top
Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53024 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/8/2006 7:40 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
>> In the 1920's, about half of the "retiring" population had no savings.

In the 1950's, about half of the retiring population had no savings.

At last report, in the 1990's about half the retiring population had no savings (and will rely on Social Security for all of their "post retirement" income.)
<<

Ah. But this doesn't say how much those who ARE saving are putting away.

There are always going to be a percentage of people who live for today -- but for those who see the writing on the wall that they will have no pension and quite possibly little or no Social Security, I would bet they are saving until it hurts because they KNOW it's their only line of retirement defense.

#29

Print the post Back To Top
Author: OldOne Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53026 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/8/2006 11:13 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
There are going to be competing effects here.

1. Boomers are going to start selling assets soon, but are going to sell them slowly. There is nothing quite like knowing that you will never work another day in your life to incentivise a person to not spend it all at once.

2. The coming SS problems are going to convince younger workers to save more. How are they going to do this? They are going to buy the stocks that retired boomers are selling. As long as the country can keep these two effects balanced out, we will be OK.



Print the post Back To Top
Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53028 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/9/2006 5:32 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
I'm 22, and many of my friends don't save/want to/understand why they should. All through high school and college people would spend all their money that they made. Perhaps once they are out of college for more than a few months (we graduated last May) they will start realizing that its expensive to live when its not on mom and dad's dime (I'm just as guilty, but I at least managed my bills, my parents would give me a chunk of money at the beginning of each semester, so I was forced to budget or go without food by Halloween). My roommate whose lifestyle is very expensive is finally realizing this (he just found out he might be going from a $55,000 job he found out he hated to a less than $30,000 job he will love, but won't be able to live on).

WRJ


Well, you are about my daughter's age and I agree that you have a challenge. We Boomers gave you our two income lifestyle and debt that saw your college tuition boom (you probably have loans), housing prices rise beyond your means, and the prospect of higher taxes to pay for it. So, I congratulate you on adjusting.

However, for Goofyhoofy (and I invite you to comment WRJ), these Millennials are a remarkable group. Beginning with roughly the '82's some have adopted the Versace lifestyle, but they also introduced the "buy at Goodwill" look too. In college I see these kids being much more thoughtful, critical thinkers, demanding of value, and what I'd call prudent risk takers. Many see them as the next great generation, and I agree.

If we Boomers don't screw it up too bad I have great confidence you'll fix things (probably by making us pay for our obligations -- but that's another story).

And, back to the point, I think they'll do it by encouraging investment in business (their jobs) by our retirement funds over a much longer time period than more pessimistic posters prognosticate.

Hockeypop


Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53032 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/9/2006 9:03 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
You posted the total in 401Ks and 403Bs, but that's not the amount by boomers alone, right?

Correct.

You then made the assumption that the majority must be boomers because they had more time to collect, but that's far from guaranteed logic, because:

I made the assumption that the lion's share of those dollars would be in the hands of boomers. I never suggested that it was guaranteed.

1) these plans haven't been around for the full length of most boomer's careers
2) the limits for these plans were substantially lower for a long portion of boomers careers
3) there's worry about the going forward economy because most boomers haven't saved up substantial assets for retirement. Isn't the stat that the averge 60 year old has like $50K or $100K or something?


While they have not been around forever, boomers have had the most oppoortunity to contribute to them. They have had the most opportunity to have those contributions grow.

Regarding #3, I cannot say. I simply posted the research I recently read that indicated the average rollover was over 100K. Now someone in their 30's certainly has a chance of having that much in their 401k but I think it much more likely that someone that has been contributing for 20 years has a better chance at that. In my experience, the older the client, the bigger their 401k. I cannot say I have ever seen a rollover from someone in their 20's for 100k plus - but that is common for retirees.


Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53034 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/9/2006 9:36 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
One more fundamental point here.

The real question is what controls market prices. If its simply an instaneous reaction to supply and demand, then we should be worried. But lets remember that long term, the market values stocks. That stocks represent ownership of a business and what it would cost to purchase that business whole.

If companies, or the market as a whole, are doing well, if they're profits are healthy and increasing, as they are *most* of the time, then the value of the company will go up and the stock price... in its wiggly, waggly ways... will follow.

I suppose you could argue, that if there is substantial selling, that we might see some multiple compression from there, but there are typically good, solid economic reasons for, again, *most* P/E and other valuation multiples that companies trade at.

Personally, I think that stock prices will continue to follow company results and future outlook and that a 'boomer crash' will be a whole lotta Y2K-esque nothing.


However, for Goofyhoofy (and I invite you to comment WRJ), these Millennials are a remarkable group. Beginning with roughly the '82's some have adopted the Versace lifestyle

I've never known what generation I belong to and now I'm even more confused. First time I've heard 'Millennials'.

- Fred
Born in '81

Print the post Back To Top
Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53035 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/9/2006 10:07 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
<Born in '81 >

Gen Y, I think.

Print the post Back To Top
Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53036 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/9/2006 10:16 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Hmmmm, that made me look.

Wiki hedges their bets, but does say:

If the years 1978-2000 are used, as is common in market research, then the size of Generation Y in the United States is approximately 76 million

The term Generation Y first appeared in an August 1993 Ad Age editorial to describe those teenagers born between 1974 -1980. [2] The scope of the term has changed greatly since then, to include, in many cases, anyone born as late as 2001. There is still no precise definition of years.

Numerous alternative terms have arisen that are generally synonymous with Generation Y. These include The Net Generation, Millennials, Echo Boomers, iGeneration, Second Baby Boom, Google generation, Myspace Generation, MyPod Generation (from the fusion of "Myspace" and "iPod"), and Generation Next.

Interesting article though:

http://en.wikipedia.org/wiki/Generation_Y

Print the post Back To Top
Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53037 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/9/2006 10:18 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Individuals born in the late 1970s and early 1980s, at times identified as an overlap group of both Generation X and Generation Y, are referred to as the MTV Generation. See that article for more information, as well as information on Cold Generation Y.


But Wiki still can't make up its mind... hehe. Another place said often defined as 82-2000. I'm really kinda stuck between.

Print the post Back To Top
Author: wrjohnston91283 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53039 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/9/2006 11:38 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
I've never known what generation I belong to and now I'm even more confused. First time I've heard 'Millennials'.

<Born in '81 >

Gen Y, I think.



The split between generation x and y is right around 1980. The term millennials became popular by a book/study that I was forced to read for a class in college that I couldn't sell back.

I'm not a big fan of placing too much emphasis on what each generation is like and their attributes. My 6 year old cousin and myself (23) are both Generation Y. However, our childhoods are going to be completly different. I grew up just as computers were booming, went to high school during one of the greatest stock market/economy booms and went off to college right after 9/11. She was born very shortly before 9/11 and has had computers all her life. The study talked about the type of toys "Millenials" played with and the TV we watched. She will not play with the same toys I did, nor will she watch TV shows similar to mine (gender differences aside).

I think using generations to split time segments and age groups up is ok, but it can be taken too far.

WRJ


Print the post Back To Top
Author: pedorrero Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53045 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/9/2006 10:21 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
This discussion did not really consider the future of social security, medicare, most pension systems, and the overall problem (way too much public and private debt and/or future implied obligations.)

Of course, no one really knows for sure, but several reputable folks over the years have made alarming predictions, and less than reputable folks like me are pessimists too. All the numbers I've seen paint a rather horrible future in terms of deficits, tax hikes, benefit cuts, or any manner of "paying the piper" for what is the main problem:

(1) That there is no way that promises made in past years will be able to be kept to those to whom they've been made.


Print the post Back To Top
Author: madbrain Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53080 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/10/2006 7:07 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Hawkin,

Last year, I rolled over $95k from a former employer's 401k to the new one. I was 29. That's not a $100k plus rollover, but close ;) And the total balance with the rollover was well over $100k. So it happens.

I started contributing to my 401k at 19, but that year it was very little ($1000). And almost nothing at 20 also. But after 21 I started putting it as much as I could - not quite as much as I wanted, due to HCE limits.


Print the post Back To Top
Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53082 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/10/2006 9:35 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Mad, your anecdotal experience really does not add anything. You admit that you put as much as you could. Do you think your situation typical or atypical?

I never stated that it does not happen. I stated that the likelihood of it happening vs it happening for someone much older is remote, simply based on the years it takes to accumulate assets.

Print the post Back To Top
Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53171 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/15/2006 3:41 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
...a lot of Gen X'rs and especially Millennials are a LOT more serious about saving/investing that we boomers.

I have to agree with Goofy--baloney. Just this weekend on the Wall Street Journal Report these percentages of actual contributors to 'eligible' contributors in 401k's were reported:

Baby Boomers 78%
Gen X 65%
Gen Y 33%

These numbers are from memory so may not be exactly right, but close enough. What the numbers illustrate, in my view, is that the closer you get to retirement, the more obvious it becomes that you have to save. The majority of folks don't wake up to this reality until sometime in their forties.

2old


Print the post Back To Top
Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53177 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/15/2006 7:53 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
2old4bs

H-pop: {{{...a lot of Gen X'rs and especially Millennials are a LOT more serious about saving/investing that we boomers.}}}

"I have to agree with Goofy--baloney. Just this weekend on the Wall Street Journal Report these percentages of actual contributors to 'eligible' contributors in 401k's were reported:

Baby Boomers 78%
Gen X 65%
Gen Y 33%

These numbers are from memory so may not be exactly right, but close enough."


Some more numbers, from a recently published Scott Burns column:

"The table shows median net worth for households as of 2004, arranged by age of the chief earner. To find your rank, go to the right age category and find the net worth closest to yours (dollars in thousands):

Age of chief Top 1% Top 5% Top 10% Top Median
earner -------------------------------25%
r
80 or older $3,349 $1,770 $1,149 $536 $188
70-79 ------$9,198 $1,945 $1,106 $489 $183
60-69 -----$10,188 $3,075 $1,522 $699 $232
50-59 ------$9,554 $2,223 $1,180 $570 $188
40-49 ------$4,710 $1,297 $zz746 $353 $113
30-39 ------$1,971 $zz451 $zz272 $121 $z39
20-29 --------$607 $zz206 $zz103 $z30 $zz6

SOURCE: VIP Forum"

http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2006/stories/DN-burns_13bus.ART.State.Edition1.1f27ded.html

"You don't need as much money to be considered well off as you did a few years ago. A 20-something is in the top 25 percent with a net worth of only $30,000. That's down from $37,800 only three years earlier."

Id.

"A 30-something household needed $148,000 to be in the top 25 percent in 2001 but needed only $121,000 in 2004."

Id.

For prior data see:
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/alsoonline/wealth_scoreboard.html

2001 Data:
Age Group --Top 1% ---Top 5% Top 10% Top 25% Median

80 or older $2,322.4 $1,165.7 $zz762.6 $346.0 $143.0
70-79 ------$7,038.0 $1,866.2 $1,077.3 $486.5 $173.5
60-69 ------$9,722.7 $2,861.0 $1,408.6 $463.1 $168.2
50-59 ------$9,054.0 $2,435.3 $1,154.7 $456.0 $178.7
40-49 ------$4,161.5 $1,206.5 $zz677.9 $324.6 $107.0
30-39 ------$1,833.2 $zz533.3 $zz352.3 $148.0 $z38.6
20-29 ------$zz885.5 $zz163.0 $zzz94.5 $z37.8 $zz7.8

1998 Data:
Age Group --Top 1% ---Top 5% Top 10% Top 25% Median

80 or older $2,957.8 $zz693.0 $440.0 $252.2 $118.0
70-79 ------$4,338.1 $1,074.5 $703.4 $316.5 $140.9
60-69 ------$6,263.4 $1,850.2 $902.8 $356.7 $155.8
50-59 ------$5,791.7 $1,410.6 $708.8 $326.7 $120.9
40-49 ------$3,402.7 $zz829.0 $531.6 $226.8 $z86.2
30-39 ------$1,210.1 $zz451.1 $267.5 $127.4 $z34.7
20-29 ------$zz383.3 $zz148.2 $z78.3 $z25.4 $zz5.2

I find the median numbers depressing, and what I would really like to see is the 75% (i.e., 1 in 4 have less than X).

Regards, JAFO


Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53179 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/16/2006 7:42 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
2old4bs

H-pop: {{{...a lot of Gen X'rs and especially Millennials are a LOT more serious about saving/investing that we boomers.}}}

"I have to agree with Goofy--baloney. Just this weekend on the Wall Street Journal Report these percentages of actual contributors to 'eligible' contributors in 401k's were reported:

Baby Boomers 78%
Gen X 65%
Gen Y 33%

These numbers are from memory so may not be exactly right, but close enough."

Some more numbers, from a recently published Scott Burns column:

"The table shows median net worth for households as of 2004, arranged by age of the chief earner. To find your rank, go to the right age category and find the net worth closest to yours (dollars in thousands):

Age of chief Top 1% Top 5% Top 10% Top Median
earner -------------------------------25%
r
80 or older $3,349 $1,770 $1,149 $536 $188
70-79 ------$9,198 $1,945 $1,106 $489 $183
60-69 -----$10,188 $3,075 $1,522 $699 $232
50-59 ------$9,554 $2,223 $1,180 $570 $188
40-49 ------$4,710 $1,297 $zz746 $353 $113
30-39 ------$1,971 $zz451 $zz272 $121 $z39
20-29 --------$607 $zz206 $zz103 $z30 $zz6

SOURCE: VIP Forum"

http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2006/stories/DN-burns_13bus.ART.State.Edition1.1f27ded.html

"You don't need as much money to be considered well off as you did a few years ago. A 20-something is in the top 25 percent with a net worth of only $30,000. That's down from $37,800 only three years earlier."

Id.

"A 30-something household needed $148,000 to be in the top 25 percent in 2001 but needed only $121,000 in 2004."

Id.

For prior data see:
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/alsoonline/wealth_scoreboard.html

2001 Data:
Age Group --Top 1% ---Top 5% Top 10% Top 25% Median

80 or older $2,322.4 $1,165.7 $zz762.6 $346.0 $143.0
70-79 ------$7,038.0 $1,866.2 $1,077.3 $486.5 $173.5
60-69 ------$9,722.7 $2,861.0 $1,408.6 $463.1 $168.2
50-59 ------$9,054.0 $2,435.3 $1,154.7 $456.0 $178.7
40-49 ------$4,161.5 $1,206.5 $zz677.9 $324.6 $107.0
30-39 ------$1,833.2 $zz533.3 $zz352.3 $148.0 $z38.6
20-29 ------$zz885.5 $zz163.0 $zzz94.5 $z37.8 $zz7.8

1998 Data:
Age Group --Top 1% ---Top 5% Top 10% Top 25% Median

80 or older $2,957.8 $zz693.0 $440.0 $252.2 $118.0
70-79 ------$4,338.1 $1,074.5 $703.4 $316.5 $140.9
60-69 ------$6,263.4 $1,850.2 $902.8 $356.7 $155.8
50-59 ------$5,791.7 $1,410.6 $708.8 $326.7 $120.9
40-49 ------$3,402.7 $zz829.0 $531.6 $226.8 $z86.2
30-39 ------$1,210.1 $zz451.1 $267.5 $127.4 $z34.7
20-29 ------$zz383.3 $zz148.2 $z78.3 $z25.4 $zz5.2

I find the median numbers depressing, and what I would really like to see is the 75% (i.e., 1 in 4 have less than X).

Regards, JAFO


JAFO:

Thanks for the charts! They're a little hard to read, but I'll try tonight. What day in the WSJ -- I'll dig and get it. Several quick thoughts before my meeting:

First, The contributions to 401k is a bit irrelevant unless you compare it to what WE saved at that age (and that has some problems too -- WE should be lower). I frankly don't remember 1/3 of people 20-29 saving when I was a young boomer (but I forget a lot and fantasize about it too).

Second, at least for 1998 and 2001 it looks like comparable 20-29 year olds ARE increasing their net worth faster than inflation at the top 25% levels (and I think you're right to compare these groups). It seems to break down a bit for 2004, but that was after the 9-11 crisis too.

Third, overall looking at we boomers (and I understand it's off topic), we boomers are in TERRIBLE shape. Back to the Hedgehog thread, your numbers show that generations after the boomers will NEVER be able to bail the majority of us out.

Fourth, you remind me that perhaps many of the higher ed "experts" I listen too don't look at the actual numbers. Thanks, I will.

Hockeypop

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53180 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/16/2006 9:27 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
H=pop: "Thanks for the charts! They're a little hard to read, but I'll try tonight.

"
Your welcome. And I am sorry, but html formatting is not one of my strong suits.

"What day in the WSJ -- I'll dig and get it."

Data is not from the WSJ, but from Scott Burns's columns, and I provided the links in the original post. If you follow them, you will get charts that are easier to read.

I will take one more shot at a better chart:
Year Age of Chief		Top 1%		Top 5%		Top 10%		Top 25%		Median
Earner

2004 80+ $3,349.0 $1,770.0 $1,149.0 $536.0 $188.0
70 - 79 $9,198.0 $1,945.0 $1,106.0 $489.0 $183.0
60 - 69 $10,188.0 $3,075.0 $1,522.0 $699.0 $232.0
50 - 59 $9,554.0 $2,223.0 $1,180.0 $570.0 $188.0
40 - 49 $4,710.0 $1,297.0 $746.0 $353.0 $113.0
30 - 39 $1,971.0 $451.0 $272.0 $121.0 $39.0
20 - 29 $607.0 $206.0 $103.0 $30.0 $6.0

2001 80+ $2,322.4 $1,165.7 $762.6 $346.0 $143.0
70 - 79 $7,038.0 $1,866.2 $1,077.3 $486.5 $173.5
60 - 69 $9,722.7 $2,861.0 $1,408.6 $463.1 $168.2
50 - 59 $9,054.0 $2,435.3 $1,154.7 $456.0 $178.7
40 - 49 $4,161.5 $1,206.5 $677.9 $324.6 $107.0
30 - 39 $1,833.2 $533.3 $352.3 $148.0 $38.6
20 - 29 $885.5 $163.0 $94.5 $37.8 $7.8

1998 80+ $2,957.8 $693.0 $440.0 $252.2 $118.0
70 - 79 $4,338.1 $1,074.5 $703.4 $316.5 $140.9
60 - 69 $6,263.4 $1,850.2 $902.8 $356.7 $155.8
50 - 59 $5,791.7 $1,410.6 $708.8 $326.7 $120.9
40 - 49 $3,402.7 $829.0 $531.6 $226.8 $86.2
30 - 39 $1,210.1 $451.1 $267.5 $127.4 $34.7
20 - 29 $383.3 $148.2 $78.3 $25.4 $5.2


http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2006/stories/DN-burns_13bus.ART.State.Edition1.1f27ded.html

http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/alsoonline/wealth_scoreboard.html

Regards, JAFO

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: hockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53181 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/16/2006 12:46 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Thank you JAFO very much. I also took a quick look at the articles.

Interesting (and damning to my premise) that the ONLY group not to make substantial advancements was the 20-29 year age group (although MY definition of Millennials usually starts in birth year 1982 age group, which would have been 22 in 2004--mostly just graduating). I still wonder how participation in retirement programs compare with their age group in relation to the numbers you quoted.

Also, Burns points out that most of the top wealth is from business owners, and this might have been harder for young people after 2001. Then again, that would have been difficult for all groups.

I'm not quite ready to give up my premise yet (don't confuse me with numbers????) because I think it's too early (but the 2007 numbers will be important). I'd also appreciate the thought of some of our younger folks to this board, which I don't think we got on the thread.

Really appreciate the links and the thought.

Hockeypop

Print the post Back To Top
Author: ziggy29 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53182 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/16/2006 12:57 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
>> Interesting (and damning to my premise) that the ONLY group not to make substantial advancements was the 20-29 year age group (although MY definition of Millennials usually starts in birth year 1982 age group, which would have been 22 in 2004--mostly just graduating). I still wonder how participation in retirement programs compare with their age group in relation to the numbers you quoted. <<

I suspect it's largely because the young people of today who are just starting out looking for their first entry-level job are competing more and more with cheap overseas labor, which is depressing their wages and salaries.

#29

Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53183 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/16/2006 1:13 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
hockeypop wrote: Interesting (and damning to my premise) that the ONLY group not to make substantial advancements was the 20-29 year age group (although MY definition of Millennials usually starts in birth year 1982 age group, which would have been 22 in 2004--mostly just graduating). I still wonder how participation in retirement programs compare with their age group in relation to the numbers you quoted.

ziggy29 wrote: I suspect it's largely because the young people of today who are just starting out looking for their first entry-level job are competing more and more with cheap overseas labor, which is depressing their wages and salaries.

Since they are looking at net worth, my theory would also include a higher student loan and other liability balances in 2004 vs. 2001, in addition to lower starting salaries.

AJ

Print the post Back To Top
Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53213 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/17/2006 4:42 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
From the article:

On the other hand, Mr. Murphy noted, some of the older groups are getting much wealthier. To be in the top 10 percent of those 80 and over, for instance, the net worth requirement soared to $1.15 million from $762,600 – an increase of 50.7 percent.

When you consider that net worth numbers include the considerable increase in real estate values over the past 8 years, the changes in these numbers for the 'old' vs: the 'young' are not really surprising. For the most part the young have had to take on enormous mortgage debt and therefore have not seen their net worth increase 1 to 1 with the increase in real estate valuations. The 'old' on the other hand (with low or non-existent mortgage debt) will have recognized the increase in their net worth.

I find the median numbers depressing, and what I would really like to see is the 75% (i.e., 1 in 4 have less than X).

Perhaps I'm missing something, but, for example, if we know that the top 25% aged 50-59 have $570,000, then I think it's safe to assume that the lower 75% have less than that. If the median is $188,000, I guess we can assume that it's a normal bell curve with approximately 1/2 having more and 1/2 having less. Although it would be interesting to see if the curve is skewed in either direction, and if those skews change by age group. For example, if the younger groups are skewed to the low end, and with age the skew eventually moves to the high end.

Nonetheless, I agree that the median numbers are quite scary. What I don't understand is if the top 25% of those aged 50-59 is $570K, then who the heck are these developers selling all these active-adult community homes to at prices of $350K +?

On a personal note, part of what inspired me to 'get off my duff' in 1998 was seeing these median numbers, and how far behind them I was. In 1998, I had only 24% of the median for my age group. In 2001, I had only 42%. In 2004, I had 185% of the median. Although I'm sure I'm still not in the top 25%, all this scrimping, saving and hard investing work seems to be paying off. At least I 'feel' more secure, however misguided that may be. ;-)

2old




Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: foolazis Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53215 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/17/2006 6:21 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
If the median is $188,000, I guess we can assume that it's a normal bell curve with approximately 1/2 having more and 1/2 having less.

That is actually the definition of median - 50% of the population greater and 50% less. The median is not affected by the shape of the curve.

foolazis
- remembering his statistics from long ago

Print the post Back To Top
Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53217 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/17/2006 9:09 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
2old4bs:

<<<<I find the median numbers depressing, and what I would really like to see is the 75% (i.e., 1 in 4 have less than X).>>>>

"Perhaps I'm missing something, but, for example, if we know that the top 25% aged 50-59 have $570,000, then I think it's safe to assume that the lower 75% have less than that."

That is true, but it is not the information about which I am curious.

"If the median is $188,000, I guess we can assume that it's a normal bell curve with approximately 1/2 having more and 1/2 having less."

I would not assume a normal bell curve distribution.

"Although it would be interesting to see if the curve is skewed in either direction, and if those skews change by age group."

It is definitely skewed.

"On a personal note, part of what inspired me to 'get off my duff' in 1998 was seeing these median numbers, and how far behind them I was. In 1998, I had only 24% of the median for my age group. In 2001, I had only 42%. In 2004, I had 185% of the median. Although I'm sure I'm still not in the top 25%, all this scrimping, saving and hard investing work seems to be paying off. At least I 'feel' more secure, however misguided that may be. ;-)"

Good for you. Congratulations!

Regards, JAFO




Print the post Back To Top
Author: RetiredVermonter Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53249 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/20/2006 4:09 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Hockeypop:

Most boomers won't be able to fully retire at 65, so the sell off period will be extended;

Some may still retire at 62 -- as we did -- since ANYONE can retire at 62, of course, at the lower rate.

Vermonter

Print the post Back To Top
Author: RetiredVermonter Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53250 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/20/2006 4:13 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Do your numbers for "net worth" include equity in their HOMES or not?

Just wondering!

Vermonter

Print the post Back To Top
Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53253 of 76418
Subject: Re: Boomers and their breaking of the market Date: 8/20/2006 7:35 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
RetiredVermonter: "Do your numbers for "net worth" include equity in their HOMES or not?

Just wondering!"


They are not my numbers.

It is my understanding that they do include equity in real estate, including homes. Remember that not everyone owns (probably slighly less than 2 in 3 do); and of those that own, many still owe mortgages.

Regards, JAFO






Print the post Back To Top
UnThreaded | Threaded | Whole Thread (33) | Ignore Thread Prev Thread | Next Thread
Advertisement