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Old 12-21-2013, 08:29 AM
 
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I am one of the Boomers and the following is another article in the ongoing Bloomberg series on the new face of retirement. I am posting it here as it is a good economic read and perhaps not as much of interest for most in the retirement forum.
Boomers as Retail Clerks Shows Why Greenspan Saw Low Growth Era - Bloomberg

Quote:
And that’s if populations age as expected. If people live just three years longer than current Key developing nations, too, may struggle. China’s working-age population over the next two decades will shrink, a legacy of the one-child policy it adopted in 1979. In coming years, that will be enough to strip more than 2 percentage points from annual growth, which over the past four years has averaged 9 percent, according to Citigroup Global Markets.

Central bankers’ traditional tools may prove ineffective in economies dominated by older populations, leading to greater volatility, according to one International Monetary Fund assessment. Persistently low interest rates could invite frequent brushes with deflation or reckless private-sector borrowing.
forecasts -- a typical margin of error -- the $15 trillion to $25 trillion in global pension fund obligations will increase by $1.4 trillion to $3 trillion, according to an August report of the Bank for International Settlements’ Joint Forum, a global body of insurance, banking and securities regulators.

To help pension funds cope with this “longevity risk,” a market in swaps, hedges and bonds is emerging. If not carefully policed, these new investments could spread risks akin to those of the complex mortgage securities at the heart of the 2008 financial crisis.

“Losses arising due to longevity risk may affect the stability of the financial system,” the Joint Forum said in its report.
Quote:
By 2030, more than one of every five Americans will be at least 65 years old, up from about one in seven today. By 2056, those over 65 for the first time will outnumber those under 18, according to the Census Bureau.
Quote:
Even as the 76 million boomers’ every taste and whim has been scrutinized, the economic consequences of aging -- on work, savings, consumption, interest rates and international capital flows -- have drawn scant discussion.
Sorta glad to be one of the early Boomers. Sorta funny that the very low interest rates seniors hate, we may well be contributing to the creation of.
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Old 12-21-2013, 09:02 AM
 
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Thanks for posting this thread. I think we have big issues and few ideas. The debate on another thread regarding health care is illustrative of one major challenge for the nation ie. what are healthcare rights?

Another article in Bloomberg speaks to part of our problems and that is we don't want to think about our own deaths.

Death Dinners at Baby Boomers
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Old 12-21-2013, 09:02 AM
 
Location: Upstate NY 🇺🇸
36,764 posts, read 12,206,687 times
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Interesting article. Greenspan may want to blame boomers for low interest rates, but this little girl isn't buying it. The low interest rates are just what the Fed (and the current wealth-redistribution administration) intended. They're good for borrowers, whether or not they're responsible credit users, and bad for savers and seniors. What better way to reduce and suppress the growth of seniors' savings (wealth).

And BTW, he's smoking the wacky weed if he thinks that boomers are living longer than their parents. Whether we have environmental hazards/contaminants or that contaminated childhood polio vaccine to blame, anyone who taps into the obits on a regular basis and sees dead boomers survived by one or both parents knows that's not happening.
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Old 12-21-2013, 09:20 AM
 
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low rates are great for debtors and that is just what most americans are . most owe more than their net worth so low rates benefits a whole load of americans more than a few extra cents on their non exsistant long term savings,


if they happen to do have long term savings wrapped up in a bank and not diversified in other investments which by the way did great than they deserve to be penalized for not paying attention and taking little interest in their money..

the same way we all learned to take an interest in our food labels folks have to learn to take an interest in their own finances.
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Old 12-21-2013, 10:50 AM
 
8,029 posts, read 4,565,600 times
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Quote:
Originally Posted by Delahanty View Post
Interesting article. Greenspan may want to blame boomers for low interest rates, but this little girl isn't buying it. The low interest rates are just what the Fed (and the current wealth-redistribution administration) intended. They're good for borrowers, whether or not they're responsible credit users, and bad for savers and seniors. What better way to reduce and suppress the growth of seniors' savings (wealth).

And BTW, he's smoking the wacky weed if he thinks that boomers are living longer than their parents. Whether we have environmental hazards/contaminants or that contaminated childhood polio vaccine to blame, anyone who taps into the obits on a regular basis and sees dead boomers survived by one or both parents knows that's not happening.
Low interest rates were put into play before the current administration.
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Old 12-21-2013, 10:55 AM
 
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there are so many times in our history we had negative real returns because of low rates compared to inflation.

this is nothing new.

From 1967 to 2010 the average real return is 1.91% and the median annual real rate of return is 2.17%. that is before taxes.

even when rates were higher inflation tempers them right back down again in real returns..
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Old 12-21-2013, 11:21 AM
 
Location: WA
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This is a new world socially and financially with a new level of aging population with unseen challenges and advantages.

We have longevity and health never seen before along with public programs to provide for the aging population rather than the family and charity support of the past. A period of prosperity has allowed record wealth allowing a greater percentage of retirees than ever seen.

Government has distorted monetary and financial markets with unprecedented levels of regulation, extreme policy and monetary / debt expansion.

Nothing we have seen in the past has prepared us for this new environment and each generation will have to adapt to new conditions.

This is not a baby boomer issue, it is a societal issue created with many decades of drift away from individual responsibility, free markets, and stable currency. Buckle in, it just gets more challenging as we go on.
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Old 12-21-2013, 12:48 PM
 
19,284 posts, read 25,802,911 times
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Quote:
Originally Posted by TuborgP View Post
I am one of the Boomers and the following is another article in the ongoing Bloomberg series on the new face of retirement. I am posting it here as it is a good economic read and perhaps not as much of interest for most in the retirement forum.
Boomers as Retail Clerks Shows Why Greenspan Saw Low Growth Era - Bloomberg









Sorta glad to be one of the early Boomers. Sorta funny that the very low interest rates seniors hate, we may well be contributing to the creation of.

it doesnt help that a record number of people are on welfare
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Old 12-21-2013, 12:58 PM
 
31,027 posts, read 37,068,087 times
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Quote:
Originally Posted by LordSquidworth View Post
Low interest rates were put into play before the current administration.
Yeah, I think some folks have forgotten about Greenspan.
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Old 12-21-2013, 01:00 PM
 
31,027 posts, read 37,068,087 times
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Quote:
Originally Posted by mainebrokerman View Post
it doesnt help that a record number of people are on welfare
The article is focused on the structural problems being created by our aging population. As you note the record number of people on welfare will be competing with the elderly for resources especially Medicaid resources as in nursing homes. The current population excluding those Boomers already retired are working and helping to pick up the tab for those on welfare. Soon many of them will be transitioning from contributors to dependence. Ouch! Big picture solutions are not even being discussed, however individual solutions in many cases are being worked on.
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