Demographics and capital market returns

By 2010, longevity in the United States will have increased by nearly 15 years since 1940 but the retirement age for full Social Security and Medicare benefits will have increased by only a single year. As those of us in the Baby Boom approach "normal" retirement age, the population will contain nearly twice as many elderly people (over 65) relative to "normal" working-age people (age 20-65) as society has ever seen.(1) The simple fact is that moving from the current level of just under 3 workers per retiree to just over 1.5 workers per retiree is a likely formula for interclass and intergenerational rebellion; therefore, something will have to give.