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


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Baby Boomers and Retirement

Introduction

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

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 ***** boomer collects Social Security, 2007). Now, the ratio is just three workers ***** every one reitiree and *****s will soon outnumber workers. According to ***** Council ***** Economic Advisors chartered with providing objective economic analysis and advice on the development and implementation domestic and international economic policies, ***** 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. Beginning in *****, the Social Security Trust Fund will be bankrupt beca***** the resources available to the system (payroll *****es plus income taxes on Social Security benef*****), will be insufficient ***** cover the liabilities of the ***** (benefits scheduled for retirees, people ***** disabilities, and other beneficiaries). If nothing is d***** to add to Social ***** resources, benefit payments would have ***** be reduced by roughly 27 percent.

Like Social Security, Medicare resources ***** become strained as aging baby *****s grow in number. A study by the Centers for ***** and Medicaid Services reveals that Medicare spend*****g ***** expected to grow ***** $844 billi***** 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 2017, 27.5 percent of eligible Medicare enrollees are expected ***** enroll in managed-care plans, compared with 16.4 ***** in 2006.

Often overlooked ***** overall discussions of ***** benefits is that ***** ***** population will also negatively impact another very important component of GDP, consumption, in the not too d*****tant *****. Personal consumption, at 70 percent, is the largest ***** of ***** (Facts on policy: Consumer Spend*****g). The aging of the baby boom ***** will affect the ability ***** many retailers to grow and prosper (Retailing 2015: New frontiers). The most rapidly growing age segment in the United St*****es is the 55+ segment. By 2015, leading-edge baby boomers will be approaching age 70, a lifestage when spending on many goods ***** services such as softgoods and homegoods and c*****sumables *****s to decline. In fact, the only category expected to experience an incre*****e in spending will be healthcare.

Possible Solutions

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