This May 10, 2014 photo provided by AARP Life@50+ shows the discount booth for AARPDiscounts.com at AARPs semi-annual Life@50+ National Event & Expo in Boston. The last of the Baby Boomers turns 50 this year, and if they want to cry into their beer about getting older, at least they can now buy it at a discount. The first of the so-called senior discounts kick in at age 50, generally along with an AARP card. (AP Photo/AARP Life@50+) ORG XMIT: NYLS228 (Photo: AP)

So Baby Boomers, heading into retirement and leery of risk, will unload their stocks – and deflate the equities market for a long time, right? Don’t bet on that. For reasons ranging from low bond yields to estate planning, they’ll likely stick with stocks, especially those paying nice dividends.

Of the 314 million people who live in the United States, 76 million or nearly 25% were born between 1945 and 1964. This Baby Boom generation sent a pressure wave of demand through the economy for the past 40 years. Boomer consumption created wealth.

Wealth led to increased savings. Financial innovations – notably the 401(k), individual retirement account, mutual fund and discount retail brokerage firm – helped direct much of the nation’s savings from banks into stocks.

Baby boomers are beginning to retire. Standard operating procedure for many retirees is to move savings away from growth assets (stocks) and to income assets (bonds). There are even target date mutual funds that mechanically make that shift, without regard to market conditions, to arrive at a bond heavy weighting by the specified date, usually when the investor wants to retire.

But now market strategists fear retiring Baby Boomers will want to sell their shares en masse and become a headwind for stock valuations for many years.

Here are the factors that make such a sell-off unlikely to happen:

First, interest rates are low and may stay low for a long time. Normally, as the business cycle migrates from recession to recovery, policy makers raise interest rates to manage accelerating inflation. The Great Recession ended in the United States in June 2009, and in the second quarter of 2013 in the eurozone. But the rate of growth does not merit higher rates.

The Federal Reserve intends to keep rates low for an extended period. In early June, the European Central Bank reduced interest rates from 0.25% to 0.15%, a new low, and dropped the rate on overnight bank deposits at the central bank to minus 0.1% – meaning it now charges banks to park money with the ECB. A negative interest rate on overnight deposits is a first.

The current yield on the 10-year Treasury is roughly 2.5%. A AAA-rated tax-free municipal bond with a 10-year term has a yield of about 2.2%. With inflation running at roughly 2.1%, the real rate of return (nominal yield less inflation) on 10-year Treasuries and municipal bonds is 0.4% and 0.1% respectively. A five-year U.S. Treasury offers essentially a negative 0.5% return currently.

Faced with low yields from fixed-income investments, Baby Boomers may have to continue to own stocks as a way to capture income from dividends and capital appreciation. The yield on the Standard & Poor’s 500 is currently 1.85% and the stock market offers principal appreciation over time.

The top 50 highest paying S&P 500 dividend paying stocks selected from an equal weighted position in all 10 S&P 500 industry sectors has a current dividend yield of about 3.2%. Not only are stock dividend yields attractive relative to bond yields, but S&P 500 corporations are raising dividend payouts. Last year, dividend payouts increased 11.8%. In late May, McDonald’s announced plans to return up $20 billion to its shareholders by 2016 through dividends and stock buybacks.

Second, the Baby Boomers may not be as old as we think. While they are moving into the last third of their chronological lives, they are just now reaching the halfway point of their investment lifespans, assuming they became net savers at about age 30.

The median age for the demographic group is 58. According to a recent Gallup poll, the average age when Americans expect to retire is 66, up from 63 in 2002. Based on Social Security Administration actuarial tables, the life expectancy of a 58-year old person is roughly 26 years. The median Baby Boomer has nearly eight more work years to build additional asset value to cover an average of 18 years of retirement.

Third, the Baby Boomers who own stocks are a minority of wealthy households. If they did unload their stocks, the impact wouldn’t be as deep as some fear.

Fourth, the stock-owning Boomers want their portfolios to keep growing to pass on to their heirs. The Boston College Center on Wealth and Philanthropy released a study in late May on the $59 trillion that is expected to be passed from the Boomer generation to their offspring. One-fifth of the households will account for 88% of the $59 trillion transfer, the study says.

Wealth is concentrated at the top. Many of these affluent households have multi-generational wealth and investment horizons that far exceed the 16-year average retirement time frame. With a long-term view, transitioning aggressively to fixed income at a time of low rates is not appealing.

Finally, the Baby Boomers are no longer the biggest kids on the block. For the first time since 1947, America’s most common age is no longer part of the Boomer generation.

New Census Bureau data shows that 22-year-olds are now the most numerous age group in America, followed by 23-year-olds and then 21-year olds. In fourth were 53-year olds. The 20-somethings have the investment time horizon to accept higher volatility in exchange for higher returns. But so do 53-year-olds with roughly three more decades of life expectancy.

Year-to-date, the top 50 dividend paying S&P 500 stocks equally weighted across the 10 S&P 500 industry sectors appreciated by over 8%, nearly 70% more than the S&P 500 total return index (including dividends). Much of the reason for the out-performance of high dividend paying stocks is the decline in fixed-income yields.

Demographic trends typically last for decades. It is possible, all else being equal, that the Baby Boom generation supports dividend-paying stocks for years to come.