Photo: Advisor Perspectives
You’ve almost certainly heard before the line that “demographics is destiny” when it comes to the economy, and there’s plenty of evidence that age demographics play a big role in stock market valuations.So what’s next for the US?
Doug Short has put together a really cool set of charts showing not only the changing age of the US population, but where, specifically, the baby boomer generation fits into it all.
Using that data, I’ve developed a set of population pyramids for the U.S. that start with 1981 and span seven decades at 10-year intervals. My pyramids differ from the ones available at the Census Bureau website in one key respect. The CB pyramids are based on population numbers by gender for each five-year cohort whereas mine are based on percentages. Why? Because, in the absence of an overpopulation problem, the shifting ratios over time are more important than the actual numbers. By using percentages on the horizontal axis, all pyramids add up to 100%.
Throughout his charts you can see where the baby boomers fall on the pyramid. As the baby boom generation moves further and further up the pyramid, questions about entitlements and dependency ratios are only going to surge.