Monday, August 07, 2006

GAO Reviews Data on Retiring Boomers and Effects on Financial Assets Markets

As the first wave of baby boomers become eligible for retirement benefits, concerns have been raised about the possibility for boomers to sell off large amounts of financial assets in retirement, with relatively fewer younger U.S. workers available to purchase these assets. Analysis of this situation by the General Accountability Office (GAO)--presented in its report Retirement of Baby Boomers Is Unlikely to Precipitate Dramatic Decline in Market Returns, but Broader Risks Threaten Retirement Security (GAO-06-718)--suggests that retiring boomers are not likely to sell financial assets in such a way as to cause a sharp and sudden decline in financial asset prices.

However, due, in part, to the decline in traditional pensions that provide guaranteed retirement income and the rise in account-based defined contribution plans, the retirement security of boomers and others will likely depend more on individual savings and returns on such savings.

Source: General Acountability Office Highlights (July 28, 2006)

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