A new study from Tiburon Strategic Advisors takes a broad look at consumer wealth, the pending baby boomer savings crisis and boomers' likely liquefaction of assets. Consumer Wealth, Liquefaction and the Retirement Income Challenge addresses the financial concerns and savings goals of consumers and consumer households in the U.S. today.
The study conosolidates information from several sources, including data from Tiburon's benchmarking tools, financial firms' websites, detailed news searches, analyst reports and interviews from financial industry participants.
As 78 million baby boomers look to retire over the next 20 years, they'll begin liquefy their retirement, personal and illiquid assets. The expected buyers of these assets-Generation X-however are already taking on large sums of debt, igniting concern that they will not be able to purchase these assets and provide the liquidity boomers need. A credit crunch could delay some boomers' retirement.
"When they retire over the next two decades, the boomers are going to look to sell their businesses and, For some, their homes. There has to be a market for this, which is their children-Generation X. But Generation Xers have taken on a great amount of debt much earlier-tens of thousands of dollars for expenses such as school. And so the questions is how are they going to buy all these homes and businesses? It's assets transferring, but that generation has a lot of debt, which will put the boomers' liquefaction plans into question," says Chip Roame, managing principal at Tiburon Strategic Advisors.
One lifesaver many expect to get the boomers out of their sinking savings crisis is the trillions they are expected to inherit from the generation before them. But Tiburon's report doesn't offer much hope, finding that the median value of boomer's likely inheritance is just $48,000. Further, only 2% of boomers who have already received an inheritance got more than $100,000. In fact, only 15% of boomers expect any inheritance at all.
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