As millions of Americans move from asset accumulation to income generation, there WILL be dramatic effects on the stock market and on income producing assets.
Just think for a moment and look at this graph of population. In 1950, a wide base of workers supported a relatively small population of elderly people.
Now look at us today.
How can the wide overhang of Baby Boomers aged 55 to 75, expect their kids in the narrow waist of workers in the USA, to simultaneously…
…..Buy their stocks when they want to sell…..
……Buy their homes when they want to downsize…..
…..Fork out trillions in Medicare and Social Security……
…Fund and out of control, profligate Government…
…Pay their own Taxes….
….Oh, and Support Their Own Families (YOUR GRANDKIDS!!)….
It simply can’t be done. There isn’t enough wealth creation going on to support the simultaneous need for asset disposition, Government spending, Social Security/Medicare/Etc, private investment, asset accumulation, and education.
Clearly, we have a Demographic Time bomb on our hands.
What can you do about it? Well, honestly there is very little you can do to change reality. But you can protect yourself and your family’s financial future by making sure your income needs are covered.
The biggest risk, as I see it, is relying on the stock market to provide for an orderly appreciation of your assets.
Ditch the systematic withdrawal plan as your sole method of generating income. Put a foundation of Guaranteed Income in place you can rely on, and take pressure off your equity portfolio.
You can also see this provocative chart in motion below: