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Kandel on the 'boomers'
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August 25, 2000: 11:14 a.m. ET
Retiring baby boomers won't withdraw from stock market en masse
By CNN Financial Editor Myron Kandel
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NEW YORK (CNNfn) - Some people are worried that when the baby-boom generation actually begins to retire in earnest within the next decade it will sell huge amounts of stock -- either because it needs the funds to live on or because it will collectively develop a new sense of caution -- and that will precipitate a stock market collapse.
Not me.
 It's true that part of the reason for the market's rally over the last few years was an influx of money into pension and other retirement funds. But that doesn't mean there's going to be a huge sucking sound of withdrawals when the baby boomers retire from the active workforce.
There are several reasons for that. First, there's no reason to think that retirement funds will be the only assets that a retiree owns. Many of them have other savings and investments, as well as substantial equity in a home or apartment that may very well have risen sharply in value. And so they're likely to draw on these assets before taking money out of funds whose earnings can continue to grow without tax liability. And even after those retirees reach the mandatory withdrawal age of 70-1/2, those withdrawals can be spread out over a substantial period of time.
And finally, a headlong rush out of stocks into bonds is unlikely if the stock market remains relatively strong and investors look forward to future gains. (Hopefully, as investors approached the retirement age, they had already opted out of highly speculative issues in favor of less-risky stand-bys.)
Also, a number of other factors will militate against any abrupt stock selling that could upset the market. As our economy becomes more and more information and technologically oriented, people will work longer and postpone retirement, both because they are not worn out by strenuous physical activity and because their work continues to be challenging and rewarding. Part-time jobs, working at home and better health also will contribute to this trend. Traditional concepts of retirement will have to be re-evaluated.
On top of all this is increasing knowledge about retirement planning. The accompanying series of articles on the subject reflects that interest. Surveys show that Americans still need to know much more about investing for retirement. But they are beginning to recognize that need, and they are eager to become better informed.
As they do, I feel assured that they won't be the ones to precipitate a major stock market downturn. To use the immortal words of the legendary financier J.P. Morgan, "Stocks tend to fluctuate." And so will the over-all market. But I'm not worried about the possibility of a baby-boomer crash. 
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