(FORTUNE Magazine) – If you think of retirement as a nice, tranquil place where you can stretch out and finally breathe easy, you'd better put your ear to the ground.

Listen.

They're coming. You can hear the thundering, still distant, but deep and heavy and closing fast. Soon they'll arrive, and then economic chaos will break loose as 77 million baby-boomers stampede into retirement and do--well, pretty much what they did to Davy Crockett coonskin hats, rock & roll, college, suburbia, mutual funds, sport-utility vehicles, and everything else that's been in their path. When boomer demand slams into markets, prices often soar (until the herd passes). Nothing stops them. And if you find this prospect disquieting, remember that there's a bright side. Just a little ahead of the boomers is an excellent place to be, and you can be there if you know where they're going.

It's always been this way. The largest generation in U.S. history--incredibly the largest still, though the country is now far more populous than when the boomers were born--has been warping markets ever since it jump-started the diaper and baby-food industries in the late 1940s. Construction of elementary schools shredded municipal budgets--Los Angeles was spending $1 million a week on new schools in the mid-1960s--and then the horde rolled on, abandoning many of those buildings. When young adult boomers wanted cars, they made the Mustang and Camaro into phenomena; then the stampede passed, and sales withered. Suburban homes were next: In many desirable areas, prices exploded in the '80s as boomers did the family thing, then sagged in the '90s after most boomers had bought. The herd never stops.

Now, as the boomers hurtle toward retirement, you've got to figure they'll continue causing econo-havoc. But what kind? Will they crash the stock market as they unload the equities they've been acquiring so furiously? Will prices of pleasant bungalows on placid lakes start growing faster than a boomer's waistline? Or in an alternative doom thesis, will a falling stock market make everyone feel poorer, causing real estate to go bust? Will trying to get into a top-rank assisted-living community in 2020 be like trying to get into Princeton was in 1970? And with 77 million boomers apparently thinking they're going to be part-time consultants in retirement, will the going rate for consulting be higher or lower than that for making Slurpees at 7-Eleven?

The answers will shape your retirement into something you may scarcely recognize. No one before has had to plan around anything like this generation's frightening economic power. Obviously many other forces--recent waves of immigrants, interest rate swings, business cycles, wars--can affect the economics of your retirement; at times they may even overwhelm demographic factors. But rest assured that the vast boomer generation will make its presence felt by squeezing markets and moving prices. Such changes create opportunity for those who know they are coming--and are prepared.

REAL ESTATE Without doubt, the greatest opportunities are in property. As your grandfather sagely advised you, they aren't making any more of it, so shifts in demand cause prices to swing more sharply than they do for other goods. The power of boomer demand has been whipsawing this market since the boomers bought their first starter homes--or one-bedroom apartments--in the late '70s.

Just hope you don't own those places; the herd has moved on. "There's a glut of starter homes on the market now," says Wallace Epperson, an investment banker who studies real-estate demographics. That's because the boomers have migrated up to larger suburban homes, with predictable effects on prices. The oldest boomers started the frenzy in the '80s. Average home prices in New York more than doubled from 1983 to 1988, while Los Angeles saw similar increases from 1985 to 1990. "We used to have three cars waiting behind one another to get into a house," says William Raveis, CEO of William Raveis Real Estate, the largest independent realtor in Connecticut. He recalls instances when buyers would sell the contract to a house without ever having moved in and still make a 30% profit.

So what happens when the herd turns its awesome power on life's next stage of real estate? Just what you'd expect: Suburban homes may start to go the way of the Camaro while retirement homes become the next pricey gem. Don't think it's too soon to start focusing on this. The older and better-off boomers are already giving serious thought to where they'll live next. Observes the 52-year-old Raveis: "The group my age is saying, 'Ten years from now where do I want to be?' In the next three to five years I think you'll see some interesting decisions being made."

The suburban selloff and retirement-home upswing could start even sooner if Congress enacts a large tax exemption for capital gains on homes. Current law lets a homeowner exempt up to $125,000 of gain on a home, but only when the owner is over 55, and only once. President Clinton and congressional Republicans have proposed far more generous (though conflicting) measures that would grant exemptions at any age, more than once, and up to $500,000. Warns Peter Chinloy, a professor of finance and real estate at American University in Washington: "If that tax exemption is passed, a lot of people will want to cash out."

So should you buy the cottage by the lake now to beat the crowd? That depends. The sharpest jumps in suburban land prices occurred in crowded metropolitan areas, where desirable undeveloped land was extremely scarce. Large parts of the Midwest, by contrast, never saw spikes in real estate values. That means if your retirement heaven is, say, North Dakota, there may be little advantage in buying very early. But if you long to live in the heart of San Diego--and you think other boomers will too--then you may want to buy sooner rather than later.

HEALTH CARE Chances are you will eventually need some kind of long-term care involving doctors' services and maybe a stay in a nursing home. And like land in Greenwich, Conn., or Bel Air, Cal., the supply of these services is not highly expandable--which means prices could leap when boomer-fueled demand kicks in.

That's surprising; you'd think entrepreneurs would be itching to build new nursing homes to tap demand that is already surging. It doesn't happen for a simple reason: Nursing homes are licensed by the states; about half the $78 billion spent on nursing home care in 1995 was paid by Medicaid, and a major chunk of Medicaid funds comes out of state budgets. Result: State governments figure they can save money by holding back nursing home construction. "If the status quo continues," says Linda Keegan of the American Health Care Association, the major nursing home trade group, "we'll see a situation where baby-boomers have to get on waiting lists, and it will be very difficult for them to obtain the services they want."

For different reasons, the doctor supply behaves similarly. With the encouragement of state medical societies, state governments have stopped building new medical schools and granting licenses for private schools, and federal rules tightly restrict foreign doctors' ability to practice in the U.S. As with nursing homes, supply can't increase to meet market demand, and that foreshadows sharply rising prices when millions of boomers start getting frail.

How can you protect yourself? For starters, you can make the coming surge in boomer demand work for you by investing in companies positioned to capitalize on it. Besides HMO and hospital operators, you should consider the shares of companies in the nursing home and assisted-living industries. John Hindelong at Donaldson Lufkin & Jenrette recommends Alternative Living Services, Manor Care, and Sun Healthcare Group.

Another smart move, depending on your age, may be to buy long-term care insurance. Believe it or not, some experts recommend that you buy a policy as early as 55. You may feel great at that age, with long-term care a distant possibility. But the experts' advice isn't crazy.

A good long-term care policy will pay toward your expenses not only for a nursing home but also for home health care, adult day care, assisted living, hospice care, Alzheimer's centers, and other types of care. The younger you are when you buy, the lower the premium. At 55 you can pay $400 to $1,600 a year for coverage, depending on the features you choose. So deciding when to buy involves a careful weighing of the health care costs in your area, the premiums, and your odds of needing the coverage.

That last factor may surprise you. For example, at age 50 you face only a tiny chance of entering a nursing home but roughly a 30% chance of being disabled for 90 days or more--and possibly needing assistance. Another powerful reason to buy on the early side: A preexisting condition may prevent you from getting coverage at any price. If you have a family history of Alzheimer's, for example, an insurer cannot turn you down, but if you have the disease, it can.

Buying wisely means choosing the right features. Start with the daily benefit the policy pays, typically $50 to $300. Then there's the length of coverage, from a year to an unlimited period. Roy Gosselin of Travelers Group says, "A five-year policy will cover you 85% to 90% of the time." And be sure to get the inflation rider, which increases coverage 5% annually.

THE STOCK MARKET The one place where attention is already focused on boomer dynamics is the stock market. The logic is well known. Says Mike Wolf, executive vice president and senior portfolio manager of American Express Asset Management Group: "The major factor, the steady driving force in the stock market today, is the demographics. For the past several years the baby-boomers have been the primary driver of the stock market, and they will continue to be for the next several years."

The argument gets practical when you think about the boomers cashing out as they near retirement. But economist Alan Reynolds, director of economic research for the Hudson Institute, finds no evidence that funds flows move the market. "Take the flow of money into mutual funds," he says. "It was a bare trickle in the '80s, yet we had a booming market. It accelerated in 1994, yet '94 was a lousy year. There's just no correlation between these things."

Even if boomers do pull away from stocks, that probably won't crash the market; Stanford economist John Shoven figures they'll retire over a 30-year period (roughly 2005 to 2035), which means their selloff of stocks will be spread mighty thin. More likely is that boomers, like other retirees, will shift into safer, income-producing investments--mainly bonds--as they age. If other factors don't act up, this could even set the stage for an extended period when bonds outperform stocks. Don't laugh--it's happened before, sometimes for years on end. (For more on the reasons to consider bonds, see the following story.)

EVERYTHING ELSE Your retirement will feel the largest generation's clout in many other ways. Will you work in retirement? Probably. Just remember that the boomers have been bending labor markets since millions of them poured into the work force in the '70s, sending real wages down 8% after years of steady increases. If this is a course you intend to pursue, start laying the foundation now. You don't want to be just another consultant in the crowd.

What will you drive? Today's craze for sport-utility vehicles will have passed, but for now, says analyst Gary Lapidus of Sanford C. Bernstein, "demand is constantly ahead of supply. That means capacity utilization is high, and in the auto business that equals fat profits." If you want the boomer status symbols, expect to pay big markups going forward. That goes for cars, golf memberships, and everything else they crave.

None of this is a disaster. On the contrary, you can have a comfortable, even joyous, retirement that lasts a long time. Just remember that you must plan it according to rules no one has had to follow before. Above all, keep your eye on that massive throng just cresting the horizon. Because it's charging this way.

REPORTER ASSOCIATES Patty de Llosa, Thomas Healy