Will the Demand for Assets Fall When the Baby Boomers Retire?
"The Congressional Budget Office (CBO) produces regular reports on the state of the
U.S. economy as well as 10-year and long-term projections of the nation’s budget
and economic outlook. In its analyses, CBO examines a range of developments that could have short- or longer-term consequences for the economy. In the decade to
come, one such important development will be the retirement of a substantial proportion of the baby-boom generation—the segment of the nation’s population
born between 1946 and 1964, whose oldest members turned 62 in 2008.

Although the shift in demographics caused by that group’s retirement from the
workforce might affect the U.S. economy in many ways, this background paper
focuses on what could happen in just one area: the demand for assets, particularly
financial assets, such as stocks and bonds. Some economists have warned of the
possibility of a dramatic decline in demand as baby boomers sell off their assets
to finance consumption in retirement; they assert that the sell-off could cause a dramatic decline in prices. An evaluation of the evidence, however, indicates that such a dramatic decline in asset demand and prices is unlikely."