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

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Baby Boomers and Retirement


The 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 ***** in m*****d, the paper recommends those policies that are ***** likely to maximize *****.

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

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

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

***** overlooked in overall discussions of ***** ***** is that ***** ***** population will also negatively impact another very important component of GDP, consumption, ***** the not too d*****tant *****. Personal consumption, at 70 percent, is the largest component of GDP (Facts on policy: C*****sumer Spending). The aging of ***** ba***** boom generation 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 *****by boomers will be approaching age 70, a lifest*****ge when spending on many goods ***** services such as softgoods and homegoods and c*****sumables begins ***** decline. In fact, the only category ***** to experience an increase in spending will be healthcare.

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