The aging bull market has been a tremendous boost for the aging baby boomer generation that can now retire. A recent article by Bloomberg points out the bull market has given near retirees the confidence they needed to make the leap from employment and retirement. In some cases, older workers have been laid off. If they had money invested in the stock market, they could fall onto a bigger financial cushion. Even though the bull market is helping boomers exit the job market, every aspect of the economy still seems unstable to me as a member of Generation X. Experts say the 5-year bull market has translated into $14 trillion in stock values. Rallying stocks may help fund the boomer retirement, but it’s not doing a lot for many younger people. I’m left to wonder about when financial relief is going to reach Generation X.
Dealing with layoffs
According to Bloomberg, many near retirees have given up on the job search. At the same time, there are 8 million seniors still working, which is 72 percent higher than 10 years ago. Because of the sheer size of the boom population, the job market is still crammed with older workers. That means Generation X children will still have trouble finding work, unless they go into the health field or other fields that relate to caring for the elderly baby boomers. Without better paying jobs, most people don’t have the money to invest.
Getting back to even
Fidelity Investments reported that average 401(k) balances nearly doubled to about $89,000 last year due to the stock market. For boomers 55 and older, the balance was much higher at $165,200. My retirement account reached about $90,000, but then declined about 10 percent this years. It’s difficult to tolerate the market when it took the entire bull market just to get back to even. As boomers start to sell their stocks to fund retirement, it’s realistic to think the market will enter bear market territory. It would only take one fearful scenario for most boomers to sell their stocks, which could easily translate into the worst stock market crash in history.
Sharing responsibility for health
Instead of asking baby boomers to put aside money for health care during times when the economy was booming, it’s all of a sudden a crisis. Younger generations are expected to pay more than ever for health insurance premiums. We continue to pay into the Social Security and Medicare program even though experts promise Gen-Xers will receive at least a 30 percent cut. Meanwhile, more boomers can retire due to the Affordable Health Care Act. Perhaps motivating more boomers to retire is one of the bright spots of the Affordable Health Care Act.
While the short-term scenario looks bleak for the younger generation, it may get better. Meanwhile, it won’t be easy to be a retired person when inflation hits. People on fixed incomes have a more difficult time paying for higher gasoline, food and other costs. For any retiree who doesn’t get out while the market is at a high, it’s going to be a rough retirement road. Of course, if they do get out of stocks, it will cause a crash that will probably permanently damage Generation X’s meager portfolios.
More from this contributor:
Finding the Magic Retirement Number
Why Gen-X Doesn’t Need at Much Wealth
Living Like we Have one Income