Governments take control of Baby Boomer Retirement Nest Eggs

Baby Boomers should start to worry in my view. My title could become fact. The level of apathy displayed on the part of many if not most Baby Boomers about managing and protecting their nest egg is frightening. Government may be forced to take control to save us from ourselves.

I have to say I was not at all surprised by the survey results I read in the Australian Financial Review yesterday. The article written by Barrie Dunstan was on a survey conducted be Mercer Financial into what I assume is Baby Boomer awareness of their imminent retirement and the state of their nest eggs.

What they found was very concerning and in my view and could end up with governments taking control of the distribution of our nest eggs in the belief they can do a better job of managing, protecting and tracking our retirement nest eggs after retirement.

Just take a look at some of the findings:

  • Many Baby Boomers are unaware of the stock market turmoil and its likely affect on their retirement nest egg
  • 72% actually expect their nest egg to be higher this year 0-( ostrich head-in-sand
  • 19% thought it would be much higher
  • 57% were not worried about the falls in the stock market affecting their nest egg
  • Over 25% showed a major lack of interest in their own retirement
  • About 25% expected to be less comfortable in retirement
  • 29% of Baby Boomers still do not know their own investment strategy
  • Many Baby Boomers do not understand they are the ones risking their nest egg whilst their financial advisers are still getting paid
  • Most Baby Boomers are unaware of the impact fees and charges will have on their final nest eggostrich head-in-sand amount

This is fodder to the Wealth Management Industry who will have their government lobbyists out there asking for more and more control over our retirement funds. Once governments see how ignorant, apathetic and disinterested Baby Boomers really are in looking after their own retirement they might see it as a mandate to take over.

They would put in place some monstrous high fee monitoring system agreed to by the wealth management industry that will “protect us” from our apathy and disinterest in our own retirement. They will admit the experiment into self-funded retirement didn’t work and agree we cannot be trusted to manage our own money.

Much has been written on the fact that we are the first generation to ostrich head-in-sandhave to manage our own retirement and that we are ill-equipped to do so. There is very little education about this and many Baby Boomers are still blissfully unaware they are in charge. What’s worse is we are in our late 50’s and early 60’s and are old enough to know better. We should be educating ourselves. What happened to self responsibility?

It is in the interests of the wealth management industry to market themselves as our trusted protectors in all matters to do with our retirement. We have been taken in by the marketing hype and have abdicated responsibility to our financial advisers. For 25 years we have been asleep at the wheel and now we just don’t have the energy or interest to wake up at the very time we most need to take control.

Already our total nest eggs funds are likely to be 20-30% down from where they should be after 25 years of high fees and charges. So we ostrich head-in-sandcan expect more of the same.

Governments hand in hand with wealth managers would get their hands on billions of dollars which they could put to “good use” as they slowly dole out our own money as pensions to us Baby Boomers. Think about that. If we can’t even be bothered to take an interest in our own retirement nest egg then it seems reasonable we may need government help to do this.

Governments will farm out the actual administration of our nest eggs to the wealth managers for a nice fat fee thank you very much. These are the very people that are taking large chunks of it now in fees and charges. Remember I mentioned one Bank in Australia reported earning more money from its wealth management arm than it did from its core banking last year.

It may be that if governments can pool our nest eggs and outsource the manostrich head-in-sandagement of our pensions they can wash their hands of us. I can’t blame the next generation if they do this – we are an expensive lot to maintain as we will live a long time. If we cannot be bothered to manage our retirement and they are worried we will become a burden on the state, then so be it. Witness how many prime ministers and presidents are alive today and living off the public purse. There will be just too many of us Baby Boomers to feed.

6 Responses to “Governments take control of Baby Boomer Retirement Nest Eggs”

  1. Peter says:

    Hi David,

    The Mercer Financial findings are amazing and support my personal experience talking to some of my fellow retirees who appear completely unconcerned about what has happened in the last 9-12 months. I think there could be a few suprises in store when they open their Super statements to the end of June 2008!

    Cheers… Peter

  2. admin says:

    Hi Peter,

    Yes, I think you are right. Baby Boomers will soon be asking what happened and expecting someone else to take responsibility. I hope it does give them a wake up call because if the market gets a good bounce they may be able to reduce their exposure to the equity market or at least put stop losses onto their positions.


  3. David: Always love the advice that is given here…I want you to send me the exact url for my site..I am finally putting together my links…Keep up the good work. We all need help in the finance department that is for sure. Carol Stanley

  4. admin says:

    Hi Carol,

    The URL is A description could be something like the one below.

    Baby Boomers, learn how to protect your nest egg in retirement now. The first rule is to control costs and minimize losses to preserve your capital. You’ll learn how to use safe investments for income and risky investments for growth to offset inflation.

    Thank you


  5. […] and objective not alarmist. But after reading the survey by Mercer written about in my post “Government takes control of Baby Boomer Retirement Nest Eggs“, maybe I need to be […]

  6. […] an earlier post I showed that a Survey by Mercer had 72% of people in Australian believing their retirement fund would not lose money due to the sub […]

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