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dwot (99.57)

If this is happening in Canada, what is happening in the US?

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August 11, 2011 – Comments (7)

I just read this article on discussions with "urgency" over the aging population in Canada and the costs that are no longer predicted to start ramping up some years down the road, but in "months." 

The US news has been dominated by the debt ceiling, employment numbers, recession, etc., etc., etc., and there has been relatively little news as to how the US's aging population is playing into those numbers.

Internal government documents obtained by The Globe and Mail show Canada’s aging population is no longer a problem on the horizon, but rather one that will impact the federal government this year.

Don't Canada and the US share the same baby boom?  

So, we are in year 1 where there is a demographic jump in the number of people who are likely no longer increasing investments.  Governments and pension funds have no choice but to pay benefits owed so pension funds definitely stop getting contributions and have to start paying out for this group and bringing down the deficit becomes that much harder for government.  I tend to think private draws on investments will be lagging.  I think people would want to see how they manage on their pensions before dipping into investments. 

I think this effect is small this year, but how do you think it will look in say 5 years?  Or 10 years?  What is this going to do to the markets?  The market is dominated by looking at job numbers.  Is there going to be a pension numbers to look at?

7 Comments – Post Your Own

#1) On August 11, 2011 at 11:23 PM, Momentum21 (98.18) wrote:

The impact of the baby boom is definitely an interesting discussion. Most of the conclusions are fairly negative and worth being concerned over. 

More of a burden will be placed upon their children to support them via taxes...this will be a drag on growth going forward obviously. But keep in mind that the Echo Boom is also a large demographic that has different values. 

The other major issue brought up is about Boomers pulling money out of the market. Since most don't have enough saved to retire comfortably that could go either way.

Most times the impact of the Baby Boom (positive or negative) seems to be overestimated and other variables often overlooked.

So to answer your question...I have no idea! : )  

 

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#2) On August 12, 2011 at 12:50 AM, awallejr (80.10) wrote:

The only thing I can add is that in about 30 years the boomers will be gone. 

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#3) On August 12, 2011 at 1:04 AM, mtf00l (48.59) wrote:

I suspect they will be gone much sooner.  Medical ailments will take the poorest first.  Followed shortly after by the middle class boomers.  Only the financially independent that don't suffer a medically expensive catastrophe will remain and as I understand they won't be taking advantage of the services offered by our rich uncle, Sam.   That said, with high unemployment, the younger generations will start filling the rolls of those who require a social safety net.  As long as we are a consumer based economy and continue to export and automate the productive jobs consumers will continue to shrink.  Additionally, those that would be consumers will instead pay off debt or invest and save instead of spend.  That again will leave the federal government as the consumer of last resort.  So far, that bill has been passed on the the tax payers.

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#4) On August 12, 2011 at 1:16 AM, KommanderKhaos (68.93) wrote:

We are Japan, or soon to become such, just with an ass-kicking military and a slightly better birth-rate.

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#5) On August 12, 2011 at 1:16 AM, dwot (99.57) wrote:

Wealth is related to age.  I looked for a distribution of wealth by age but didn't find anything nice and simple.  I found a net worth calculator, and used it to get average wealth by age, as follows:

20-$1,475

30-$8,525

40-$51,575

50-$98,350

60-$180,125

I think it is going to be harder for the Echo Boom to save money as they have more student debt and relative wages are considerably less then their parent's generation.

Here's something I found where it is suggesting Echo Boomers aren't interested in the market, http://echoboombomb.blogspot.com/.

 

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#6) On August 12, 2011 at 10:52 AM, Frankydontfailme (27.45) wrote:

And then add gauranteed negative real interest rates into the soup and what do you get?

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#7) On August 12, 2011 at 6:40 PM, smartmuffin (< 20) wrote:

We're ignoring it and assuming that we can simply pay for it by borrowing money from China.  Surprised?

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