Part 9/13:
The transfer is likely to exacerbate wealth disparities, with the top 10% of boomer households capturing the majority of the inheritance. Nonetheless, many retirees are relatively affluent, with average net worths exceeding $1 million.
Market and Investment Dynamics
Retirement and Asset Allocation: As boomers age, they tend to shift their investments from equities to bonds, possibly downshifting stock prices and increasing bond yields. A 10% decline in asset prices could trigger a psychological downturn, leading to increased savings and reduced spending, risking recession.
Stock Market Valuations: The hegemonic influence of baby boomers supports current high valuations, but the eventual reallocation toward conservative assets could pressure equities.