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 m*****d, the paper recommends those policies that are most likely to maximize GDP.

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

Changing demographics are straining Social Security resources. At ***** end of World War II, there were 44 workers paying ***** Security taxes for every retiree collecting from the program (The first ***** boomer collects Social *****, 2007). Now, the ratio is just three workers ***** every one reitiree and retirees will soon outnumber workers. According to the Council of Economic Adv*****ors chartered with providing objective economic analysis and 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 *****). To cover ***** shortfall and to "stay open," Social Security will use up its Trust Fund (or draw down its bank account) ***** 2018 to 2042. Beg*****ning in *****, the Social ***** Trust ***** will be bankrupt because ***** resources available to the system (payroll ********** plus income taxes ***** Social Security benefits), will be insufficient to ***** the liabilities ***** the system (benefits scheduled for retirees, people with disabilities, and other beneficiaries). If nothing is done to add ***** Social Security resources, 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 spend*****g 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 toward the private arm of *****, which tends to cost the government more. By *****, 27.5 ***** of 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 *****s is that ***** ***** population ***** 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 ***** (Facts on policy: Consumer Spending). The aging of ***** ba***** boom ***** will affect the ability of 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 age 70, a lifestage ***** spending on ***** goods and services such as softgoods and homegoods ***** consumables ********** ***** decline. In fact, the only category ***** to experience an increase in spending will be healthcare.

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