Another point to make is that not only will the boomers be selling
their stock, most of them will no longer be buying any. So that's a
big chunk of investors that will be taken out of the market around the
same time. But it is possible foreign investors could compensate for
this loss of buyers. I'm certainly not advocating following any
investment strategies based on this, I'm just raising the issue.

And how does the boomers' retirements affect real estate?

iarwain_8[at]hotmail.com wrote:

- quote -

Other posters have made a lot of good points. All I would add is that
there are so many other possible factors that could substantially
affect the return on the stock market over the next 30 years that I
think it is crazy to make any investment plans based on this baby
boomer theory.

Andy

- quote -


I think I found what I was looking for:

Q. Will my retirement pension from my job reduce the amount of my Social
Security benefit?
A. If your pension is from work where you also paid Social Security taxes,
it will not affect your Social Security benefit. However, pensions based on
work that is not covered by Social Security (for example, the federal civil
service and some state, local, or foreign government systems) probably will
reduce the amount of your Social Security benefit.


In another place, I saw that other taxable income, like savings, does not
affect your SS benefit, but the amount of your taxable income does affect
the taxes on your SS income. So, your father is correct in that you should
prefer to have as much in the Roth as possible, as income from the Roth
would be non-taxable.

Elizabeth Richardson

"zxcvbob" <zxcvbob[at]charter.net> wrote in message
news:43po03F1pf0vcU1[at]individual.net...
- quote -

I believe this may be incorrect. I think earned income will affect your
benefit, but not other income, although all income will affect the
taxability of SS benefits. I'm still searching for the information from the
SSA site.

Elizabeth Richardson

to look into this hypothesis, one would need to analyze the following:

1) value of US stock market
2) what % of this value is tied into retirement plans
3) what % of this value is tied into foreign investors
4) of the % in retirement plans, what is this breakdown into ages of
the owners of the plans?
5) what is the historical range of foreign investors % ownership of the
US stock markets value.

These are 5 points which I have not seen responses on so far. I am not
convinced this hypothesis holds water anyways, but feel free to prove
me wrong.

I don't think there's much to worry about. It's not like suddenly a lot
of
boomers will sell all their stocks. Most everyone gradually adjusts
their portfolio to support their investment horizon, which even at
retirement should probably start at 50% stock exposure, and then
in retirement they will/should tap their portfolio by about 4% per
year,
including about half via bond dividends, and 50% by stock liquidation.
Today's boomers plan (should plan) to live 20 years or more in
retirement,
so they have to keep a bit of a longterm view, and not go too
conservative
lest they lose the growth they will still need.

-- Not all people in the U.S. invest in the stock market. As
technology (and, to some extent, education) has made it more
accessible, the number of people who invest in stocks has
risen. So the generation behind the baby boomers could
conceivably have more stock investors (or a greater increase
in stock investors), even though the overall population
growth is slowing.

-- Baby boomers aren't all going to dump stocks on the same
date. Some folks will be more conservative and dump sooner.
Some, later.

-- Life expectancies continue to rise, which means the
counsel today is to keep stocks further into retirement than
before, generally speaking.

-- U.S. stock trading is increasingly globalized. While the
U.S. population may not be increasing as quickly etc., there
are untapped markets overseas. People overseas increasingly
will be able to buy stocks in U.S. companies. People
overseas will also consume the products U.S. companies make.
U.S. companies will increasingly operate their businesses
overseas. Every year, stock trading will become more
globalized, until saturation is reached, which I think will
occur well beyond your and my lifetime.

-- U.S. baby boom investors increasingly are seizing on
international stock opportunities. But if U.S. baby boomers
demand for international stocks subsides, ISTM other
countries' investors will tend to pick up the slack.

Elizabeth Richardson wrote:
- quote -


All taxable income above a certain (rather low) threshold reduces your
SS benefits. At least that's what I've been told. My parents are
living off of pensions, SS, and Series EE and E bonds. Some of the
bonds are approaching 30 years old, and the tax-differed interest is
putting them over and reducing their SS benefits. Even if he doesn't
cash the bonds, the tax is due in the year that they hit their final
maturity.

He's thinking about cashing several years worth of bonds in one tax year
so he'll get his full SS for the next couple of years, then cash
another big lot of them.

Bob

"zxcvbob" <zxcvbob[at]charter.net> wrote in message
news:43niaeF1mmg6cU1[at]individual.net...
- quote -


Do pensions, 401ks, and Traditional IRAs reduce SS benefits?

Elizabeth Richardson

- quote -

On the other hand, the oldest boomers hit 65 in five more years.
My hope is that the younger generation invests in stock like crazy
(buys it up) since they will be less likely to have pension plans or
depend on Social Security, and that will compensate somewhat. Of
course, if they end up having to pay for all the Boomers' retirements
with higher FICA taxes, they may not have as much to invest.

iarwain_8[at]hotmail.com wrote:
- quote -

I've thought about that too. I don't think it'll have a significant
effect on the stock market.

1. Baby boomers will be selling stocks gradually over 25 years. 25
years is a long time, so retiring people want to be holding stocks for
most of their retirement years.

2. Stocks have an intrinsic value. If a company is steadily earning
money, the stock price should be at least its intrinsic value.

3. I looked into U.S. census projections. It was pretty fascinating. In
2000, you can see that baby boomers, who are around 35-50 years old at
that time, are indeed a statistical blip. But in 2025, when baby
boomers are in their retirement age and selling stocks, the 35-50
population of 2025 is projected to exceed the 35-50 population in 2000
(probably due to population growth and immigration). Anyways, this
means that there will be more than enough new investors to buy the
stocks that retiring folks are selling.

http://www.census.gov/cgi-bin/ipc/id...out=s&ymax=250
http://www.census.gov/cgi-bin/ipc/id...out=d&ymax=250
http://www.census.gov/ipc/www/idbpyr.html

iarwain_8[at]hotmail.com wrote:

- quote -

I am a fairly early boomer, my wife is actually 18 months pre-boomer. I don't
see us selling a lot of stocks when we retire. We plan on being retired for a
long time (Grandma lived nearly 40 years in retirement), so we need to invest
for the long haul. To me, that means about 75% equities.

While I think there may be some effect, it should be minor. In any case, it
will take place over a long time -- the youngest boomers will not turn 65 until
2029.

-- Doug

bo peep wrote:
- quote -


Something my dad recommended when I talked to him a few days ago was to
cash out of all my qualified retirement accounts before I start drawing
Social Security (or convert/rollover them to Roths) and pay the tax
because that way it won't reduce my SS benefits. I haven't run the
numbers cuz I'm not 50 yet, and Congress has plenty of time to change to
rules multiple times before I'm retirement eligible. But it's something
to think about.

Best regards,
Bob

<<is there any reason to think that this won't happen?>
Not really - boomers supposedly currently control something like 87% of
the wealth in the US. Of course, as the early boomers (say 1946-mid
1950s) sell stock, a lot of it will be bought up by late boomers (mid
1950s-1964) who are still in the accumulation phase.

This might be a good time to start gradually shifting to a larger
percentage of health care stocks.

John Cowart

There is a theory that says that as all the Baby Boomers retire,
they'll be selling all the stocks from their 401ks, IRAs, and pension
plans so they'll have money to live on. This will flood the market
with excess stock. The law of supply and demand states that the result
will be stock prices taking a nosedive, likely over a very extended
period. In fact, some people say on of the main reasons the market is
overvalued now is because of all the Boomers buying up stock for their
retirement.

Now, since I hope to live long enough to retire myself, hopefully with
some good investments, is there any reason to think that this won't
happen?