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Older boomers faring better than young boomers

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Early boomers lost $1 trillion in the period from the beginning of the economic crisis in 2007 to March 2009, according to the Center for Retirement Research. A recent report found that despite this massive loss, compared with lifetime returns on retirement assets and later boomers’ experiences during the recession, early boomers have actually done quite well. Indeed, late boomers will need “extraordinary returns” just to get to where early boomers are today. Furthermore, the report found that early boomers have already recovered about half of their losses thanks to the rebound in the equities market.

Early boomers’ portfolios were shielded by the long bull market between 1982 and 2000, according to the report. At the deepest part of the recession, early boomers’ annual lifetime return on contributions in an all-equities portfolio neared 8 percent, compared with 3.1 percent for late boomers. Today, early boomers are earning over 9 percent, while late boomers have rebounded to only 5.5 percent.

As for late boomers’ ability to catch up, the report found that it’s not impossible, if unlikely. Late boomers would have to average a 13.2 nominal compound return on stocks to get to the same ratio of assets at 60 that early boomers enjoy today.