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 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 benefits, most notably Social Security and Medicare. With both these components 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 ***** 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 retirees will soon outnumber workers. According to the Council ***** Economic Adv*****ors chartered with providing objective ***** analysis and advice on the development and implementation domestic and international economic policies, Social Security ***** begin to incur annual operating losses in 2018, when its outlays first exceed its tax revenues (CEA memo on Social *****). To cover the shortfall and to "stay open," Social Security will use up its Trust Fund (or draw down its bank account) ***** 2018 to 2042. Beg*****ning in 2042, the Social Security Trust ***** will be bankrupt ********** ***** ***** available to the system (payroll taxes plus income taxes ***** Social Security benefits), will be insufficient to ***** the liabilities of the ***** (benefits scheduled for retirees, people with disabilities, and o*****r beneficiaries). If nothing is done to add to 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 f***** ***** and Medicaid Services reveals that Medicare ***** is expected ***** grow to $8***** billion ***** 2017, up from $427 ***** in 2007 (Zhang, 2008). The study also shows that ***** also ***** be a shift *****w*****rd the private arm of *****, which tends to cost the government more. By 2017, 27.5 percent of 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 ag*****g population will also negatively impact ano*****r very important component of GDP, consumption, in the not too d*****tant future. Personal consumption, at 70 percent, is the largest component of GDP (Facts on policy: C*****sumer Spending). The aging of the ba***** boom ***** 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 *****by boomers will be approaching age 70, a lifestage ***** spending on ***** goods ***** services such as soft***** and homegoods and c*****sumables *****s ***** decline. In fact, the only category expected to experience an increase in spending will ***** healthcare.

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