Lyman, you and Awesome are both right and both wrong. I’m 68, so I’m there and here is what has and is happening.
Social Security (SS) has not been increased and I would hope we can all agree that there has been inflation, just not enough to trigger an increase in SS payments. (Let me inject here that I am not complaining, I retired more or less in my early 50’s and have only started SS last year as per the new age requirement passed in 1983. We are in a good financial position and currently want for nothing. Well the wife wants a couple of things, but I’ll get around to those when I have more time.)
Bonds were always the go to investment for many retirees. They are safe and pay interest. If in fact they should go into default, i.s. chapter 11 or 9 the bond holders were first in line to get some of their money back. This all changed with the GM and Chrysler bankruptcies. The bond holders were moved behind employees and the Unions. This added more risk to bonds. Since the Federal Reserve has an interest rate of what 0.50% and they may up it 0.25%. Government bonds are’t that attractive either. Some countries are negative interest rate. State and Municipalities bonds are definitely riskier and we’ll see what happens in Puerto Rico.
Bank deposits are a joke at 0.01% and Certificates of Deposit maybe 1% if you leave it in for 2 years. The other thing hurting is that Crete’s banks’ bankruptcy “socialized” their loses to the depositors, and there has been talk that the U.S. may follow suit.
So the less risky investments have become more risky and close or at least narrowed the gap between themselves and equities.
So I guess you know that I’m in equities and another added bonus is that I can write calls against the equities and actually get more of a return then the normal dividends. They, equities, are more liquid then bonds so if I need cash they are sold easily.
So risk averse old people are still there, it is that the risk equation has changed, not the aversion.
Sorry it took so long to respond and I hope you see this, but there are only so many hours in the day and so much beer to drink.