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

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Baby Boomers and Retirement


***** 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 *****nefits, most notably Social Security and Medicare. With both these ***** in m*****d, the paper recommends those policies that are ***** likely to maximize *****.

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

***** demographics are straining Social Security resources. At the end of World War II, ********** were 44 workers paying Social Security taxes for every retiree collecting from the program (The first baby boomer collects Social *****, 2007). Now, the ratio is just three workers ***** every one reitiree and *****s will soon outnumber workers. According to the Council of Economic Adv*****ors chartered with providing objective economic analysis ***** advice on ***** development and implementation domestic ***** international economic policies, Social Security ***** 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 its bank account) ***** 2018 ***** 2042. Beginning in 2042, the Social Security Trust ***** will be bankrupt *************** the ***** available to the system (payroll ********** plus ********** taxes on Social ***** benef*****), will be insufficient to ***** the liabilities ***** the system (benefits scheduled for 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 ********** grow in number. A study by the Centers f***** ***** and Medicaid Services reveals that Medicare spend*****g is expected ***** grow to $844 billi***** 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 *****, which tends to cost the government more. By *****, 27.5 ***** of eligible Medicare enrollees are expected ***** enroll in managed-care plans, compared with 16.4 percent in 2006.

Often overlooked in overall discussions of ***** ***** is that the ag*****g population ***** also negatively impact ano*****r very important component of GDP, consumption, in the not too distant future. Personal consumption, at 70 percent, is the largest ***** of GDP (Facts on policy: Consumer Spend*****g). The aging of the ba***** boom ***** will affect the ability ***** 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 baby boomers will be approaching age 70, a lifest***** ***** spending on m*****ny goods and services such as softgoods and homegoods and c*****sumables *****gins ***** decline. In fact, the only category expected to experience an incre*****e in spending will be healthcare.

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