A recent very individual analysis of the wealth expectations of aging American baby boomers – those born from 1946 to 1964 – makes interesti...

A recent very individual analysis of the wealth expectations of aging American baby boomers – those born from 1946 to 1964 – makes interesting reading. Self-published by US accountant and financial advisor Daniel Amerman, it suggests that the expectations of this generation may be much too high. His argument goes as follows: the 50 million baby boomers who have such assets currently have $6.1 trillion in retirement accounts and pensions - but they expect to take out $44 trillion between 2010 and 2046. Assuming 3 per cent inflation gives a net present value cost of $22 trillion – nearly twice the current US GDP, but as more retire each year, their expectations for income from investments will rise as well, from $135 billion in 2010 until a peak of $2.3 trillion per year is reached in 2027. In that year, the cost of meeting those wealth expectations will peak at $1.3 trillion per year, or more than twice current Social Security benefits. So, the argument runs, even if those wealth expectations are met in full, the sum of all baby boomer pension and retirement account income (in current dollars) will replace only 45 per cent of the total income for all baby boomers, meaning a shortfall of 55 per cent for the entire generation, that will have to be made up from other sources.