Baby Boomers Face the Wrong Rates at the Wrong Time

In the latest whitepaper from Baird Advisors, the team provides timely insights about the current interest rate environment for the baby boom generation.

There is a generational wealth gap between baby boomers and other demographic groups that will not be closed any time soon. According to Fed data, at the end of 2020, baby boomers controlled 52.7% of all U.S. wealth compared to 26.9% for Generation X and just 4.8% for the millennials. As rates rise, demand will likely increase for bonds rather than decrease. Because rates have been near historical lows for an extended period, assets that would normally have been allocated to core fixed income have gone searching for more yield in other sectors and asset classes, often at greater risk levels. If yields on higher-quality fixed income assets rise, baby boomers will likely be even bigger buyers, enjoying the fact that they finally were able to capture the right rates at the right time.

Read the full whitepaper.