Boomers Not Ready For Retirement

GAINESVILLE - From all appearances, America's baby boomers are a nation of procrastinators wearing rose-tinted glasses.

They think just because they worked all their lives - many starting as early as 16 - they deserve a retirement with the same income as at the peaks of their careers.

Oh sure, there will be some health benefits they'll have to pay for, and heaven knows what gasoline will cost in 10 years. But they'll still be in their homes, drive two cars and take cruises whenever they like.

The 16th annual Retirement Confidence Survey conducted by the Employee Benefit Research Institute found that a large majority of Americans expect to enjoy a comfortable retirement, but many have not taken the actions needed to turn their aspirations into reality and face the prospect of having to work far longer than they expect.

Twenty-four percent of respondents said they are "very confident" they will have enough money to live comfortably in retirement, and another 44 percent said they are "somewhat confident."

But 22 percent of the respondents aren't setting aside anything for retirement. Another 40 percent have saved up less than $50,000.

We have a growing shortage of workers (allegedly the reason we need to keep importing people from the third world) while we have a growing number of retiring boomers, the vast majority of whom are physically able to work and, what's more, would benefit themselves AND society by continuing to do so.

There's another side of this that most people don't realize.

Businesses are well aware that the Boomers will soon be retiring, and taking their work ethic and pre-1960s public education literacy with them. The people due to replace them are not as motivated or as educated as the boomers. Many current college applicants are functional illiterates.

Companies are already exploring incentives to get the boomers to stay past their normal retirement age. I know my company is. (I'm getting this from HR professionals, BTW.)

The Gen-X/Gen-Y wannabe rock stars will eventually want to get good jobs. What if the boomers just hang in there and don't open up the good positions? You think we're hearing complaints now, just wait. "Jeez, Gramps, here I been worrying about having to support your Social Security payments, but instead I still have to borrow money from you like when I was a kid, cuz you still got MY dream job."

?? It took the DOW twenty-five (25) years just to break even after the '29 crash. I'm sure we agree on far more than we disagree, but not too sure about the "any ten year period" thing..

I did not do the research myself. I am guilty of repeating as fact something I read in a book on "technical investing". The flaw may be that we are looking at two different things. I reported gains averaged over a ten year period reported as a percentage and you are looking at gaining back everything that was lost in absolute terms. I think if you look at a running average over ten years the crash of October 1929 would fall entirely out of the calculation by October 1939. Even during the ten years of it being factored in it's just one data point among 520 if you are basing the average on weekly data.

As some here (FR) have said, I started out keeping Excel spreadsheets of my investments. In addition to the raw data, I plot a ten day and thirty day running average. With a running average being the sum of the past "N" days divided by "N". Tomorrow you do it again, dropping the oldest point and adding in the latest point. By doing it with "N"=10 and "N"=30 two things become apparent: The averaged data is "smoothed" (daily fluctuations are reduced) and the overall shape of the curve is the same as the raw data but delayed by the averaging period. In that sense the averaging process acts like a "low pass" filter, it smooths out the high frequency noise and introduces a lagging phase-shift. As you might guess the thirty day curve is smoother then the ten day curve.

The essence of "technical trading" can be reduced to watching the curves. If the raw data is leading the ten day curve, buy. If it drops below the ten day average, stop buying and hold. If it falls below the thirty day average, consider moving out of equities.

I have never looked at a ten year average but I'll bet it's darn near a straight line sloped up at about 10%

Regards,
GtG

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