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Stock Market Boom - 6/9/14

The U.S. stock market has been booming, and that appears to be inducing a growing number of Baby Boomers to go ahead and retire.  According to an analysis by the Federal Reserve of Philadelphia, retirees have accounted for 80 percent of the decline in the labor force participation rate since 2012.  Since the beginning of the bull market on Wall Street in 2009, the number of those aged 55 and older leaving the workforce has increased by more than 2 percent each year, the fastest clip since the technology bubble of 2000 according to the Bureau of Labor Statistics.

Household wealth in America climbed by nearly $3 trillion during the final 3 months of 2013 to an all-time high.  Average 401(k) balances almost doubled from 2009 to reach a record $89,300 last year, with 78 percent of the annual increase attributable to the stock market rally according to Fidelity.  For those who have yet to retire and are 55 or older, the average balance exceeded $165,000.  Of course, the booming stock market hasn’t helped everyone.  Stock holdings are concentrated among the wealthiest 20 percent of boomers, who own 96 percent of all equities controlled by the group according to Vanguard.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.