naturallight Wrote: ------------------------------------------------------- > BValGuy Wrote: > -------------------------------------------------- > ----- > > ^ I completely agree that the savings rates > will > > drop, but I don’t follow how consumption > > increases. Aren’t these baby boomers already > > feeding and clothing themselves, living in > houses, > > driving cars, etc? Why would any of that > change > > b/c they retire? If anything, one could argue > > that consumption drops slightly since retirees > are > > often on a fixed income (i.e. downsize their > > home). The only thing that supports your > argument > > of increased consumption would be more luxury > > items such as travel, but I don’t see it being > > that significant. > > > Yeah, I agree. If a working boomer is making 100, > spending 60, and saving 40, when the boomer > retires, he will still probably be spending 60, > maybe less. The change is that he doesn’t have the > wages of 100 anymore. the major factor here is the change in savings patterns across all demographics. boomers are richer than current retirees so they will be higher consuming retirees. their replacements in the workforce, GenX, GenY, Millennials, are broke, drowning in debt with a very low savings rate. add immigrants who have an even lower savings rate and you now have a society with a very low savings rate. since population is increasing, due to increasing immigration, consumption per capita is rising as more people are at the consumption stage of their life. its population dispersement puzzle, not a boomers are going to retire and maybe spend more, maybe spend less, maybe spend the same puzzle. boomers will probably spend the same as that is the goal of retirement, to spend the exact same (less housing costs) but with free time. that “same” amount will be greater than the “same” amount of current retirees as boomers are richer than current retirees. just in the same way that millennials will be poorer than genxer and gen yers. it won’t be until the bulge at GenY reaches age 50 that we will see consumption at such low levels again.