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:

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The majority of Mutual Funds have to be fully invested in the markets at all times regardless of the volatility or state of the market. I wondered why this is so because it flies in the face of reason.

An interesting article written in June 2004 by Maria Brill called The Cash Conundrum explains why this is so.

In 2003 the recent bull market began and there was a massive inflow of money into mutual funds. Some funds who acted rationally and in their investors interest like First Eagle U.S. Value Fund. They found they had more money to invest than good investment opportunities. Charles de Vaulx a co-manager of the fund said, Read the rest of this entry »

If you believe what is happening to the Dow then a miracle happened this week. The Dow effectively fell out of a 10 storey window and got up and walked away.

If you believe that then you may have a problem grasping the reality.

I’ll grant that with the government manipulations going on the save the stock market, sorry I mean the economy, they may well put a temporary floor under the market. But does everyone believe this is the end of the subprime mess, the credit crunch the derivative scams and any number of things that have not even come to light yet? I don’t think so Tim!

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When selecting a mutual fund to invest in one of the considerations is its Management Expense Ratio or MER. This is presented to investors as a way to compare different funds but it has some serious flaws. A different measure called the Performance Cost Ratio is a better option for directly comparing different Funds.

Now I know many Baby Boomers are in Company Retirement Plans and are in a default balanced portfolio of funds. So probably have very little idea of what MER is or why it is important - or not. Other Baby Boomers will often allow their financial planner to select the funds they invest into and trust them to do the right thing.

In my own case I allowed my financial planner to do just this and didn’t even question what funds I was invested in never mind what the MER was. Read the rest of this entry »

I much appreciate a comment I received on my Post about Apathy of Baby Boomers to take control of their nest eggs. I do believe there is a lot of truth in the comment that Baby Boomers are innocent when it comes to their retirement nest egg. But I contend this is unacceptable in an adult in their late 50’s and beyond who is or is about to retire.

In many countries around the worlds where compulsory contributions are taken out of salaries each month for all workers they can be forgiven if they lose sight of this money. Many young people today will wait 40 years or more before they see any of that money. It becomes unreal and may just be considered another form of tax. If you can’t spend it when you want to then just forget it may be the lament.

Innocence occurs because the time horizon is too far out to be of concern, plus in the early years the amount are so small as to be of no consequence. There is a total disconnect between the retirement money, the investor and the fund manager. Read the rest of this entry »

It’s seems there is deep seated apathy in Baby Boomers over their retirement nest eggs. Despite all the posts I have written on this blog there seems very little concern out there or at least any that is being expressed. This seems to be the only rational explanation. Every day there are new headlines about:

• stock market losses seriously eroding retirement nest eggs.
• financial fees and charges of up to 30 times declared costs eating into retirement funds.
• subprime crisis destroying house values everywhere including those owned by baby boomers
• baby boomers may have to work for much longer to replenish their nest eggs after the bear market and recession few admit is happening.

So why aren’t baby boomers making their presence felt?

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