Will Boomers Stay In Stocks?

A new study of 401(k) pension plan investments by benefits consultant Watson Wyatt International finds that younger participants invest far more of their assets in stocks than their elders. Whereas workers age 21 to 40 hold about half of their 401(k) assets in equity funds, the equity share drops to 30% among those age 51 to 60, and to just 13% among those over 60.

An intriguing question is whether baby boomers will stay with stocks--and the historically high returns they have produced. With the first boomers about to enter their fifties, an ongoing asset shift out of equities into fixed-income investments could spell lower returns for retirees--and less oomph for stock prices--in the decades ahead.

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