How often do you pay attention to the beat under the songs you listen to? We may unconsciously tap our foot to the rhythm. Sometimes, it is the only reason we like a particular song. Demographics, the number of people in any age group, country, income level, etc. drives our economy and our future just like that rhythm section drives a song.
I’ve been reading Prosperity in the Age of Decline by Alan and Brian Beaulieu, the economists who many Vistage Chairs and Members follow to assess opportunities and challenges in the macro world. Among many fascinating points to their book, the issue of demographics sounded a cord for me as a baby boomer. Just like I can’t escape where I am in the birth order (I’m the baby), I can’t escape and YOU can’t escape the effects of the baby boom generation. It will affect everyone living now until the boomers die off-somewhere around 2045.
According to the Beaulieus, there will be a world-wide recession in 2030, that might be avoided if we addressed the medicare, social security and health care needs of our generation. We either have to cut the benefits paid to each individual and/or start paying it out later, or raise taxes and lower government debt. And, the sooner we address it as a nation, the better chance we have to avoid that depression.
So I’m asking you – how long will you need to work if you haven’t saved enough for retirement? How much will you need to retire? Are you maxing out your 401k or pension contribution? Are you putting money into a Roth IRA? Don’t put this one off. The demographics that drive our economy won’t change. And, the results may be nasty.