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

***** GDP-Related Challenges of Baby ***** ***** *****

***** demographics are straining Social 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 ***** boomer collects Social *****, 2007). Now, the ratio is just three workers for every one reitiree and *****s will soon outnumber workers. According to ***** Council of Economic Adv*****ors chartered with providing objective ***** analysis ***** advice on the development and implementation domestic ***** international economic policies, ***** Security ***** 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 its bank account) ***** 2018 ***** 2042. Beg*****ning in *****, the Social ***** Trust ***** will be bankrupt *****cause the resources available to the system (payroll taxes plus income ***** on Social Security 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 ***** resources, benefit payments would have ***** be reduced by roughly 27 percent.

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

Often overlooked ***** overall d*****cussions of retirement ***** is that the ***** population will also negatively impact another very important component of GDP, consumption, in the not too d*****tant future. Personal consumption, at 70 percent, is the largest ***** of GDP (Facts on policy: Consumer Spend*****g). The aging of the baby boom generation 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 ***** services such as softgoods and homegoods ***** c*****sumables *****gins ***** decline. In fact, the only category expected to experience an incre*****e in spending will be healthcare.

***** Solutions



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