Essay - Baby Boomers and Retirement Introduction the Paper Explores the Effects...


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Baby Boomers and Retirement

Introduction

The paper explores the effects of the retiring baby boomer generation on Gross Domestic Product (GDP), one of the most widely accepted measures of economic growth. Two major components of GDP, consumption and government spending, will be significantly impacted by future government policies regarding retirement *****nefits, most notably Social Security and Medicare. With both these components in mind, the paper recommends those policies that are most likely to maximize GDP.

***** GDP-Related Challenges of Baby ***** ***** *****

Changing demographics ***** straining ***** Security resources. At the end of World War II, ********** were 44 workers paying Social Security taxes for every retiree collecting from the program (The first baby boomer collects Social Security, 2007). Now, the ratio is just three workers ***** every one reitiree and retirees will soon outnumber workers. According to ***** Council ***** Economic Advisors chartered with providing objective ***** analysis ***** advice on the development and implementation domestic ***** international economic *****, Social Security will begin to incur annual operating losses in 2018, when its outlays ***** exceed its tax revenues (CEA memo on Social Security). To cover the shortfall and to "stay open," Social ***** will use up its Trust Fund (or draw down its bank account) from 2018 to 2042. Beg*****ning in 2042, the Social Security Trust ***** will be bankrupt *************** ***** ***** available to the system (payroll taxes plus *****come taxes on Social ***** benefits), will be insufficient to cover the liabilities of the ***** (benefits scheduled for retirees, people with disabilities, and other beneficiaries). If nothing is done to add ***** Social Security resources, benefit payments would have to be reduced by roughly 27 percent.

Like Social Security, Medicare resources will become strained as aging baby boomers grow in number. A study by the Centers for Medicare and Medicaid Services reveals that Medicare ***** ***** expected to grow to $844 billion in 2017, up from $427 ***** in ***** (Zhang, 2008). The study also shows that there also will be a shift *****w*****rd the private arm of *****, which tends to cost the government more. By *****, 27.5 ***** ***** eligible Medicare enrollees are expected ***** enroll in managed-care plans, compared with 16.4 percent in 2006.

***** overlooked ***** overall discussions of retirement ***** is that the aging population will also negatively impact an***** very important component of GDP, consumption, in the not too d*****tant *****. Personal consumption, at 70 percent, is the largest ***** of ***** (Facts on policy: C*****sumer Spending). The aging of the ba***** boom gener*****ion will affect the ability of many retailers to grow and prosper (Retailing 2015: New frontiers). The most rapidly growing age segment in the United States is the 55+ segment. By 2015, lead*****g-edge baby boomers will be approaching age 70, a lifest***** ***** spending on many goods ***** services such as softgoods and homegoods ***** c*****sumables *****s to decline. In fact, the only category ***** to experience an incre*****e in spending will ***** healthcare.

***** Solutions

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