Replies to post #79653 on Value Microcaps Motherboard

[MikeDDKing]

One thing that counters this concern is that many companies have started automatically signing people up for their 401K's at time of employment. I believe that typically the default is the matching level of the company.

Mike

[bbotcs]

MSGI:

I don't know that I totally agree with what you are saying, but about 7 years ago, I heard a guy on CNBC say that the bull market would be over by 2010, when the first of the babyboomers start to retire.

I tend to think the party would start to end 5 years later when boomer retirees are forced to begin making withdrawls from their IRA's (age 70). By 2020, there is going to be a lot of money being withdrawn from IRAs.

The bottom line is that the move away from privately funded pensions is a very bad thing. (Oops, am I talking like a Democrat?)

401Ks stink for a lot of reasons. The number one reason is the lack of flexibility--your investment options are very defined.

I think the U.S. economy took a wrong turn when it moved away from private pensions. I am a boomer. A far greater percentage of us will be living in poverty than in my parent's generation. The days of massive numbers of retirees living well is coming to a close, I'm afraid to say.

The U.S. is headed toward either a lot of socialism or a much lower standard of living, especially for the elderly.

It ain't a pretty picture.

[lentinman]

Boomers:

IRA's or 401K's don't have to be stock. Thus, irrespective of who funds them, if people move them to cash or bonds or tbills, the markets can get just as hammered.

As to the boomer question, my own theory has always been that boomers will start to take money OUT of the markets to PROTECT their retirement. That's just common sense and is retirement planning 101. When you are 25, you put 100% in stocks. When you are 65, you have maybe 30% in stocks. Since boomers are so rich (relatively speaking), I suspect they will not hesitate to protect their assets if their retirement is at risk.

One other issue that I've always believed about boomers is that (and this was before the housing bubble even happened) boomers will downsize like crazy. So many boomers have 4,000 square foot homes, lots of yard, pool, decks, etc. It is just wayyyy more than they need as the last of the kids moves out. I suspect the day will come when they (by the masses) want to unload those monster houses and get a maintenance free 2 bedroom condo. When that happens, housing will get killed. Of course even apart from this theory, then came along the bubble. So, if there wasn't enough pain left in housing anyway, boomer retirements will add to it. Should be a major trouble area for many years IMO.

Len