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In 2005, as if by magic, Websites, TV talk and news shows, newspapers and magazines were filled with stories about how the Baby Boom Generation was going to be turning 60. In 2008, further illustrating the continuing association of the Boomers and the Beatles, the cute features were about the song “When I’m 64,” Paul’s jaunty little ditty that asked: “Will you still need me/Will you still feed me/When I’m sixty-four?”

And there’s not much risk in predicting that as the first Boomers continue to reach full Social Security retirement age—now 66 for those born between 1943 and 1954—the waves of stories will be constant.

The Boomers have always been a source of great interest to lots of people (especially themselves) and attitudes toward them vary a lot.

Comedians love to roast Boomers for getting old while never growing up. I thought the first joke I heard about a group of Sixties Survivors attending a Rolling Stones concert wearing Depends was pretty funny. The next 15 times, not so much. Same for the lists of Then and Now jokes (Then: looking for some good acid. Now: looking for some good antacid. Etc.)

Conservatives have never forgiven the Boomers—who were college (and draft) age in the late Sixties—for sex, drugs, rock ‘n’ roll and protests against the Vietnam War. That’s when things started to fall apart, according to this line of thinking.

Progressives give the generation a hard time for losing revolutionary zeal and relaxing into disco madness and cocaine use in the 70s, then settling down to buy houses, make a living, and raise kids. Too much work left undone by these lights.

Gen X-ers, Gen Y-ers and Millennials are just plain sick of hearing about Boomers. They’re more interested in their own obsessions and challenges. In other words, at least in that respect, they’re just like the Boomers.

But say what you may about the Baby Boom Generation—and since there are 77 million of them, almost everyone has something to say—their age cohort still has the highest earning power and the highest voting power and represents the biggest challenge to the medical and social services industries in the history of the U.S. What they don’t seem to have is enough money to retire on.

If financial publications are to be believed, Boomers are the least prepared for retirement of any generation before them. Citing a fall in home prices and stock prices, a study by the McKinsey Global Institute laments that “more than two-thirds of early Baby Boomer households, meaning those between the ages of 50 and 63, are financially unprepared for retirement.”

In 2013, one study showed that nearly half of all workers had less than $10,000 saved. Even people on the verge of retirement—ages 55 to 64—had nest eggs that averaged around $165,000. (The good news there is that the strong performance of the stock market raised the balances of people in the pre-retirement age cohort from just over $143,000 in 2012. Never underestimate the power of a bull market.)

Whatever your attitude toward Boomers, even if you are one, you have to admit that the potential problem is enormous.

Some retirement planners advise that you should have 70% of your current annual income in the bank for every year you think you may have of retirement.

My response: how the heck am I supposed to know how many years of retirement I might have? As a connoisseur of the obituary writer’s art, I see lots of people shuffling off at ages lower than mine. And at the other extreme my father-in-law lived to 93!

Personally, I find the idea of making lots of money and then not making more money for the rest of my life a little creepy. It’s like having a period of your life when you fill the bucket and then a period in your life when you empty the bucket. You just have to be sure to put in as much as you can and take it out as slowly as possible. Better safe than broke.

I’m not a Boomer myself. I’m one of the last of the War Babies. So I’ll keep breaking trail for the Boomers as long as I can. And I’ll watch with interest as reality catches up with the generation that thought it would change the world. Should be fascinating.

B.T.W. Whether you’re a retiree, a Boomer or a Generation whatever, you might want to consider getting more active in working toward retirement. 401(k)s are fine, but they’re way too passive to achieve real gains against inflation and predatory markets. Cabot’s advisories are specifically designed to help individual investors invest successfully.

Cabot Market Letter has been giving sound growth stock investing advice for over 43 years, helping investors make money in bull markets and protect gains when the bears are in control. 

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As Chief Analyst of Cabot China & Emerging Markets Report, I spend 90% of my time keeping track of the winners, losers and rising contenders in emerging markets. But I also run my screens on U.S. stocks, and I like to keep track of good stories and charts that appear.

Today, my stock pick is Harman International (HAR), a designer and manufacturer of sound systems for everything from living rooms to cars to concert halls. Harman interests me because I have owned home audio equipment they make and because their strong position in high-end audio for high-end cars looks like a great market niche as cars become more Internet connected and drivers want to control their tunes, their phone calls and their data feeds through an integrated system. Harman’s equipment goes into BMWs, Audis and VWs and lots of Toyotas, tying voice controls, GPS navigation, climate controls, Bluetooth devices and safety systems into one easy-to-use system that sounds great.

Harman’s Aha Radio service will soon be a standard feature in every Subaru, bringing over 100,000 channels of podcasts, radio stations, music, Facebook and Twitter feeds into an infotainment system that will be a big selling point for Subarus.

The company has been consistently profitable and HAR has been in a strong uptrend since April 2013. Coming off a multi-year base, it looks like the kind of move that can have real legs.


Paul Goodwin
Chief Analyst of Cabot China & Emerging Markets Report
and Cabot Wealth Advisory

Paul Goodwin can be found on Google Plus.

Stock Picks

Ross Stores

McKesson (MCK) distributes ethical and proprietary drugs, surgical supplies and health and beauty products throughout North America to the healthcare industry. The company also provides technical consulting services to biotech and pharmaceutical manufacturers.

Carnival Cruise Lines

Having just returned from vacation, Tim Lutts is thinking of the millions of baby-boomers who are spending more and more money on leisure travel, particularly on cruises, an industry that is dominated by a few big players.

China Biologic Products

Paul Goodwin advises putting this stock on your watch list.

Cabot Wealth Advisory

Beach Weather in the Market

By Paul Goodwin on July 31, 2015

It’s the beginning of August, high summer in New England, and a bit of summer fatigue is setting in. Summer in New England is short, so we try to pack half a year’s worth of cookouts, beach days, hikes, kayaking, sight-seeing and other outside recreation into three months. It’s fun, but the pace can be a bit frantic, especially as the season enters its third act. Frankly, all I want to do now is lie on a beach somewhere and read a book. Read More >

Managing Your Stock Portfolio to the Market's Tune

By Michael Cintolo on July 30, 2015

In today’s Wealth Advisory, I’m doing something I’ve never done before—reprinting an entire piece I wrote in Cabot Growth Investor last Wednesday. It doesn’t involve any specific stock advice (that is and always will be for subscribers only), but it details the wild divergences in the market (which are now getting lots of press—even the Wall Street Journal had a big write-up on it Monday), what it means, and how I’m advising people to handle it—I think it’s very timely.Read More >

Do Your Stocks Have Borrowing Trouble?

By Nancy Zambell on July 28, 2015

Hostess is making news today as it is issuing $1.23 million in term loans—most of which will go toward paying $905 million in a special dividend to its private shareholders—which I may add, is also more than two times what the buyers paid for this tasty snack business, and triples the company’s debt. According to Bloomberg, these types of deals grew to nearly $16 billion in the second quarter, the highest level in the past 12 months. I’m not making a judgment for or against this action. I just want to make a point that this debt, or leverage recapitalization—spurred by low interest rates—is increasingly becoming a method in which private equity holders get their money back—without selling the business. But it does burden the company with additional debt, which isn’t going to fund company expansion or operations.Read More >