Predictions that the baby boomers will crash the stock market when they retire are probably exaggerated, a Congressional Budget Office analyst writes.
Marika Santoro, a CBO macroeconomic analyst, notes in a paper that the oldest boomers turned 62 in 2008 and already are eligible to collect Social Security benefits.
“Some economists warn that if the baby boom generation begins to sell off assets to finance retirement, there could be a steep decline in the demand for assets, particularly stocks,” Santoro writes. “The amount of saving by the baby boomers during their working years might already have affected asset markets.”
The boomers might have been responsible for driving up stock prices and housing prices in recent years, Santoro writes.
If boomers begin to shift toward more conservative assets, that could lead to a big change in asset demand, Santoro adds.