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

Baby Boomers and Retirement

Introduction

***** 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 ***** in m*****d, the paper recommends those ***** that are most likely to maximize GDP.

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

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

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

***** overlooked ***** overall discussions of retirement benefits is that ***** aging population ***** also negatively impact another very important component of GDP, consumption, in the not too d*****tant *****. Personal consumption, at 70 percent, is the largest component of ***** (Facts on policy: Consumer Spending). The aging of the ba***** boom ***** will affect the ability of 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 age 70, a lifest***** when spending on many goods ***** services such as softgoods and homegoods ***** c*****sumables *****s ***** decline. In fact, the only category expected to experience an incre*****e in spending will ***** healthcare.

Possible Solutions

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