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 ***** most widely accepted measures of economic growth. Two major comp*****nts 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 m*****d, the paper recommends those ***** that are ***** likely to maximize GDP.

***** GDP-Related Challenges of Baby Boomers ***** Retirement

***** 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 baby boomer collects Social Security, 2007). Now, the ratio is just three workers for 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 first 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) from 2018 ***** 2042. Beginning in 2042, the Social Security Trust ***** will be bankrupt beca***** the resources available to the system (payroll ********** plus ********** taxes ***** Social ***** benefits), will be insufficient to cover the liabilities of the ***** (benefits scheduled for retirees, people ***** disabilities, and o*****r beneficiaries). If nothing is done to add to Social Security *****, benefit payments would have ***** be reduced by roughly 27 percent.

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

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

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