January 31st, 2017

// Riding the Waves of the Silver Tsunami – Guest Post

Riding the Waves of the Silver Tsunami

On average, 10,000 Americans turn 65 every single day.[1] This means more people retiring, collecting Social Security retirement benefits and withdrawing funds from their investments accounts, like IRAs and 401ks. This mass shift in the workforce comes with both benefits and drawbacks for the economy.


First, the bad news.


  • Higher Taxes

With more than $58 million per month being paid out in Social Security retirement benefits,[2]  people from government to employers are trying to figure out how to strengthen Social Security. Higher taxes[3] is one way to bolster Social Security’s funding as boomers draw down what’s available now.


  • Expensive Insurance

Another potential economic pitfall is the uptick in Medicare usage, which means health insurance could get very costly.


  • Economic Drain

Finally, for those boomers who didn’t save enough money while working, more elderly people will depend on their families and government programs for support. For women, this could be a bigger concern as they outlive men.


So women must consider this when planning for retirement. Unfortunately, a recent study suggests single women today are not saving what they should. A 2016 study by the Employee Benefits Research Institute and Greenwald and Associates reports that 40 percent of single women have saved less than $1,000.[4]


But, there is a silver lining to this retirement boom cloud.


  • Business Boom

There will be a huge chest of trillions that will change hands, some have dubbed it the “silver tsunami.” As retiring business owners turn over privately held companies – a new generation will be at the reigns.  For many employees, this means a chance to buy the business and even strengthen local communities and stimulate those economies.


  • More Money Being Spent

Another benefit of having such a substantial swath of the population in retirement is more time for people to spend money. This could be a great stimulator for the economy and, in turn, the stock market.


From Uncle Sam’s point of view, more people dipping into their 401ks means more tax dollars in the federal coffers.


The bottom line is that however this boom in retirement affects the economy, the same principle remains: it’s our responsibility to save for our retirement. Social Security is just one piece of the income puzzle after you retire. Savings and smart investments are essential in creating a secure and comfortable lifestyle for yourself.

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