Stock Market Encourages Baby Boomers
December 9, 1999
The baby-boom generation is approaching retirement with a great deal of confidence, thanks to the soaring stock market. Almost 90 percent of boomers polled in the most recent U.S. Trust Survey of Affluent Americans expect to feel more financially secure and will enjoy a higher standard of living in their retirement years.
- In fact, affluent boomers investments in the market have grown an average 46 percent since 1993 -- and most have added sharply to their holdings since then.
- In its poll of a sample of the top 1 percent of the wealthiest baby boomers, U.S. Trust discovered that 36 percent have $1 million or more ready for retirement versus 20 percent in 1995.
- Today, 57 percent worry about inflation, compared to 76 percent in 1995, while 51 percent worry about rising taxes versus 73 percent in 1995.
- Regarding the outlook for the stock market, 36 percent expect the boom to last longer than the next 24 months, 30 percent expect it to end in 12 to 24 months, and 19 percent expect the party to end within 12 months.
Respondents say they expect the market to return 12 percent a year for the next five to 10 years.
Economists say that such optimism has encouraged boomers to go out and spend. And personal consumption is the biggest driver of the economy -- being responsible for two-thirds of growth in gross domestic product.
Source: Jim Christie, "Torrid Stock Market's Huge Impact on the Baby Boomer Generation," Investor's Business Daily, December 9, 1999.
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