I'm thinking of my mom, who retired as a teacher and then took another job as a consultant training teachers. Many of her friends and former coworkers have done the same thing. If they were a lawyer, they retired and took a job in a different field of law. If they were a principal, they started a new school. If they were a doctor - well, they're still working. These aren't lower income people - their incomes are often well into 6-figures.

The more interesting trend, as you mention, is what this is doing to the career opportunities of the next generation. Since boomers aren't retiring, the top jobs in many organizations aren't opening up. And so many people my age and slightly older (I'm a very early Millenial) believe there's no possibility for advancement on the corporate ladder. Hence the recent trend towards entrepreneurship among young Gen-Xers and Millenials.

Whether this results in a net inflow or outflow in the capital markets depends on the real economic growth of all these startups. If they really do open new markets, then the economy expands, more money flows into savings, and the stock market keeps going up. If they don't, then the non-retirement of boomers just means a transfer of savings rates from the young to the old. Boomers won't have trouble supporting themselves in old age, but they'll have to support their kids.

Personal experiences probably determine our view of things. I think this because my parents are a single-income family. My dad rose to president of his company, which suddenly went bankrupt, and he ended up (in his early sixties) starting his own company to take over the government contracts that the previous company depended on (I helped write the business plan for that company). Most of his retirement fund came from the last few years (president + own company). Now he's moved onto a second career - namely harvesting the discretionary income of the other golfers at his club (some of them 20 years younger). ;-)

He did teach me that entrepreneurship is a lifelong pursuit.

BTW, it's curious that you're all in cash right now. I am too, as is my sister, as are most of my highly-paid college friends, as were a bunch of former coworkers (one quite wealthy - 3 successful startups) I talked to in late 2007 just as this broke. I think mattmaroon posted here once that he was all in cash, as have a few other folks, as have lots of people on Reddit.

I'm thinking there's actually a large pool of cash sitting on the sidelines, from people that didn't drink the Kool-Aid during the 04-07 boomlet. And once there's a signal that this has bottomed out - maybe it'll be Dow 10K, or S&P 1K, or the bankruptcy of the last of the big-5 investment banks - all that cash is going to come flooding back into the market, and they'll be a big pop in stock prices. I'm waiting a bit - I think there's still more bad news that hasn't been factored into the market. But it may be time to start buying soon.

It seems to me that for the past six months or so we've been in a period of monetary deflation. As long as that continues, stocks will decline. Since in our system, money is created via credit creation, it seems the thing to watch for is when big banks start to lever up again. It might be a while.

If you believe you can time the market then you might as well go all the way there and start speculating in options.

If you do not believe you can time the market though, then being 100% cash is as bad strategy now as at any other time.

Not necessarily. You can't time the bottom. You can sure as hell tell overvalued from undervalued though.

You just piped up as a potential buyer. Which means we haven't hit bottom yet. I'll wait another 6 months, thanks ;-)