[yold__]

The wealthiest generation in U.S. history (boomers) are exiting the workforce, where will they park their retirement nest egg? Bonds and savings products (CDs etc) are paying historically low rates, and lose value as interest rates rise. There are few places for the typical boomer to park that capital other than the equity markets which have served them well for the last 30 years. It is unlikely they will exit the markets and hoard cash, especially with inflation fears.

Jeremy Grantham has a megaphone right now. Every single news site keeps repeating this. They also ignore the fact that the guy is a perpetual doomsayer.

[leto_ii]

> where will they park their retirement nest egg?

I imagine a good part of it is already parked in stocks.

But since it's s retirement nest egg and they're getting retired, won't they just start spending it?

[yold__]

Typical draw-down rate is 3%-5% per year, so yes, very gradually.

[tryptophan]

> The wealthiest generation in U.S. history (boomers) are exiting the workforce, where will they park their retirement nest egg?

They will probably do what EU boomers in Spain, Greece, and Italy do, which is: suck as much money out of the younger generations as possible. Spain in particular is egregious. Older workers have every protection in the world, young have none. Pensions are 3x the salary of new workers. Taxes much higher on young people.

[gizmo686]

> The wealthiest generation in U.S. history (boomers) are exiting the workforce, where will they park their retirement nest egg?

This seems like a demographic argument for a downturn. Standard financial advice is to transition more into bonds as you approach and enter retirement. I suspect most boomers with retirement accounts will do so; either explicitly, because they are in a target date fund, or because their pension fund decides it needs to de-risk. The known downside of inflation is less of a concern than the risk of a loss if you are forced to sell during a downturn.

However, I suspect that will be a relativly minor effect compared with the bigger issue. Workers park their retirement money. Retirees spend it. Demand (and therefore prices) of both stocks and bonds will fall as the boomers switch from buying to selling in order to fund their lifestyle without working.

At a societal level, the idea of retirement savings is little more than an accounting trick. As a generation, the boomers are going to stop working, but continue consuming. Society needs to pay for that (in goods and services) somehow, which means that there will be comparatively less stuff available for everyone else.