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 the 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 *****.

The GDP-Related Challenges of Baby Boomers and Retirement

Changing demographics are straining Social Security resources. At the end of World War II, there were 44 workers paying ***** Security taxes for every retiree collecting from the program (The first ***** boomer collects Social Security, 2007). Now, the ratio is just three workers for every one reitiree ***** *****s will soon outnumber workers. According to ***** Council of Economic Advisors chartered with providing objective economic analysis and advice on the development and implementation domestic and international economic *****, Social Security ***** begin to incur annual operating losses in 2018, when its outlays ***** exceed its tax revenues (CEA memo on Social Security). To cover ***** shortfall and to "stay open," Social ***** will use up its Trust Fund (or draw down its bank account) ***** 2018 ***** 2042. Beg*****ning in 2042, the Social Security Trust ***** will be bankrupt *************** the resources available to the system (payroll ********** plus ********** taxes ***** Social ***** benef*****), will be insufficient to ***** the liabilities ***** the ***** (benefits scheduled ***** retirees, people with disabilities, and other beneficiaries). If nothing is done to add ***** Social Security *****, benefit payments would have to be reduced by roughly 27 percent.

Like Social *****, Medicare resources ***** become strained as aging baby *****s grow in number. A study by the Centers for ***** and Medicaid Services reveals that Medicare ***** ***** expected to grow ***** $844 billion in 2017, up from $427 billion in 2007 (Zhang, 2008). The study also shows that there also will be a shift tow*****rd the private arm of *****, which tends to cost the government more. By *****, 27.5 ***** ***** eligible Medicare enrollees are expected ***** enroll in managed-care plans, compared with 16.4 percent in 2006.

***** overlooked ***** overall discussions of retirement *****s is that ***** aging population will also negatively impact another very important component of GDP, consumption, in the not too distant *****. Personal consumption, at 70 percent, is the largest component of ***** (Facts on policy: C*****sumer Spend*****g). The aging of ***** baby boom generation 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, leading-edge ***** boomers will be approaching age 70, a lifest***** when spending on ***** goods ***** services such as softgoods and homegoods ***** c*****sumables begins ***** decline. In fact, the only category expected to experience an incre*****e in spending will be healthcare.

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