Either way, the drawdown is a worry in the huge US retirement industry, which managed total assets of $24.8 trillion as of June 30. Massive withdrawals will crimp the lucrative fee income for administrators. And another concern is market performance, with fewer US buyers and sellers available to potentially prop up assets.
“As the baby boomers retire and de-risk their portfolios, there isn’t enough money following them into the market to support share prices — that’s the theory,” said former financial adviser Norman Pappous, president of portfolio analysis service GradeMyAdvisor.com.
Robbie Hiltonsmith, a senior policy analyst at Demos, added that the US needs to face up to the stark savings challenges ahead as US baby boomers — more than 25 percent of the US population — now increasingly entering retirement and millennials not picking up the slack. “We could have an even worse retirement crisis than we are already projecting,” he said.
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