Fear of Mass Retirement of Boomers Overblown

September 30, 2005 (PLANSPONSOR.com) - According to Canadian demographer David Foot, the fear of the effects of the mass retirement of the baby boomer generation is overblown.

The Canadian Press reports that Foot observed, though the oldest boomers are about to turn 60, the majority of the Canadian boomers are in their 40’s and won’t retire for another 15 to 20 years. The Press defines the Canadian boomers as those born between 1947 and 1966, with a peak in 1960.

As far as healthcare concerns, Foot said that the system is currently being taxed by a large generation born during the 20’s who are now in their peak medical spending years, but that will be followed by a comparatively tiny group born during the Great Depression of the 30’s.

Foot also says the worry of a labor shortage due to the boomers’ exodus from the working world is also overblown. According to the CP, he told the Funds Institute of Canada that exploding college enrollments mean there will be “plenty of bright, young, beautiful, aggressive and well-trained workers” in the next five to ten years.

In fact, the aging of the boomer generation, according to Foot, means most boomers are entering their peak investment years. The CP reports that Foot said, “In your 40s, you sort of buy mutual funds to get your feet a little wet in the stock market and spread your risk because you don’t have very much to invest. In your 50s, you’ve got more and more money, and increasingly you’re leaving mutual funds behind and start investing on your own.”

He also said it is a myth that people in their 50’s invest conservatively. He said people in their 50’s and 60’s can afford to take more risks and maximize the stocks in their portfolio. This is where the oldest of the baby boomers are now.