Put another way: What happens to the S&P 500 when the Baby Boomers see a spike in death rates and their estate liquidates their assets?
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It’s not so sudden that anything changes really. People die every day, it doesn’t happen all at once.
Generally speaking, their inheritors keep the funds in the market. If the Boomer has a significant amount in their 401K, a fiduciary is just going to tell the next of kin to keep it market, and most people fill out a Time of Death Beneficiary so the account just transfers over to their heirs. Unless they’re in heavy debt or need a down-payment on a house, most people will just keep the account.