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


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Baby Boomers and Retirement

Introduction

***** paper explores the effects of the retiring baby boomer generation on Gross Domestic Product (GDP), one of ***** 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 benefits, most notably Social Security ***** Medicare. With both these components in m*****d, the paper recommends those ***** that are ***** likely to maximize *****.

The GDP-Related Challenges of Baby Boomers and *****

Changing demographics are straining Social Security resources. At ***** end of World War II, there 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 *****s will soon outnumber workers. According to the Council of Economic Adv*****ors chartered with providing objective ***** analysis ***** advice on ***** development and implementation domestic ***** international economic policies, 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 Security will use up its Trust Fund (or draw down ***** bank account) ***** 2018 ***** 2042. Beginning in 2042, the Social Security Trust ***** will be bankrupt because ***** ***** available to the system (payroll *****es plus *****come taxes on Social ***** benefits), will be insufficient ***** cover the liabilities ***** the system (benefits scheduled for retirees, people ***** disabilities, and o*****r beneficiaries). If nothing is d*****e to add to Social Security resources, benefit payments would have to be reduced by roughly 27 percent.

Like Social Security, Medicare resources ***** become strained as aging baby boomers grow in number. A study by the Centers for ***** and Medicaid Services reveals that Medicare ***** ***** expected to grow to $8***** billion in 2017, up from $427 ***** in ***** (Zhang, 2008). The study also shows that ***** also will be a shift tow*****rd the private arm of Medicare, which tends to cost the government more. By 2017, 27.5 percent ***** eligible Medicare enrollees are expected to enroll in managed-care plans, compared with 16.4 percent in 2006.

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

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