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 comp*****nts 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 mind, the paper recommends those policies that are ***** likely to maximize GDP.

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

***** demographics are straining Social Security resources. At the end of World War II, *****re 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 ***** Council ***** Economic Advisors chartered with providing objective ***** analysis and advice on the development and implementation domestic and international economic *****, Social Security will begin to incur annual operating losses in 2018, when its outlays ***** 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 ***** bank account) ***** 2018 to 2042. Beginning in 2042, the Social ***** Trust ***** will be bankrupt because the ***** available to the system (payroll *****es plus income taxes ***** Social Security benefits), will be insufficient to cover the liabilities of the system (benefits scheduled for retirees, people ***** disabilities, and other beneficiaries). If nothing is done to add ***** Social ***** 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 ***** Medicare and Medicaid Services reveals that Medicare ***** ***** expected ***** grow to $844 billion ***** 2017, up from $427 billion in ***** (Zhang, 2008). The study also shows that there also will be a shift toward the private arm of *****, which tends to cost the government more. By *****, 27.5 percent ***** eligible Medicare enrollees are expected to enroll in managed-care plans, compared with 16.4 ***** in 2006.

Often overlooked in overall discussions of retirement *****s is that ***** aging population will also negatively impact an***** very important component of GDP, consumption, in 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 gener*****ion will affect the ability ***** 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, lead*****g-edge baby boomers will be approaching ***** 70, a lifestage ***** spending on ***** goods and services such as softgoods and homegoods ***** c*****sumables ********** ***** decline. In fact, the only category ***** to experience an increase in spending will be healthcare.

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