Essay on "Baby Boomers Retirement Obstacles"
Essay 4 pages (1395 words) Sources: 3
[EXCERPT] . . . .
Baby Boomers Retirement ObstaclesThe Impact of the Pending Retirement of the Baby Boomers
During the period from 1946 to 1964 approximately 4 million people were born each year. This has been the greatest surge in births of any period prior or since. In 2006 the first baby boomers turned 60 and began settling into early retirement. In 2011 the first of them turned 65, the traditional retirement age. The retirement of this generation means fewer workers will be paying taxes. The problem is that each year, to cover expenditures, government loans money to itself in the form of Government Account Securities. These funds come from the Social Security Trust Fund. As the baby boomers retire and begin to collect Social Security, funds from the general fund will be required to make-up the difference between what is collected in payroll taxes and what is drawn down. This will significantly reduce resources available for other programs. In order to meet their financial obligations the government will have to cut programs, raise taxes, lower benefits, or institute a combination thereof (Pakko, 2006), otherwise Medicare and Medicaid as well as Social Security will soon be unable to deliver on their promises.
Social Security
Social Security is the United States Government's retirement income program. It covers almost all workers excluding most Federal, state and local Government workers who are not covered since they have their own pension system. It is the primary source of retirement income for about two-thirds of American retirees. The other third either have a defined benefit or a defined contribution plan that the retiree contributed to w
download full paper ⤓
Social security has a solvency problem due to the gap between smaller younger generations and a very large baby boom generation. The number of workers per retiree is set to decline from about 3.2 workers per retiree now to about 2 workers per retiree by 2030 (Kubarych, 2004). The retirement of the baby-boom generation will put exceptional strain on the current system, which is mainly a pay-as-you-go system. (This means the current payroll taxes paid by workers and their employers on their behalf go to meeting current liabilities of the Social Security system, rather than building up assets which can be used in the future to pay benefits.) the question, according to Carson, Wade and Hecht (2005, p. 158), is how and what recourses can be provided for sustaining the increasing proportion of the society that, by virtue of age or disability, no longer contributes to national income?
One solution to this problem may be to adjust the way benefits are issued. Since Social Security began life expectancy has increased and is expected to continue increasing. As Americans continue to live longer and are in better health at older ages, it makes sense to ask people to work longer to claim full benefits. A reduction in the annual cost of living adjustment (COLA) would also save money. Supporters of this idea maintain that the annual COLA is too high and based on a formula that overstates inflation. Another tactic could be to reduce benefits by 5% for future retirees. Supporters of this idea claim that fixing Social Security is the responsibility of all beneficiaries and everyone should be part of the solution. Savings could also be realized by implementing progressive indexing to reduce benefits for future retirees. This would preserve Social Security's safety net for those who need it the most. Though this makes benefits grow more slowly for middle and high income retirees they often have other sources of income. Many contend this is an equitable solution that causes minimal pain (Kubarych, 2004).
A second approach to this problem would be to increase revenues. One way to accomplish this would be to increase payroll tax for both workers and employers. Many feel a modest tax hike is a small price to pay for a strong Social Security system. This could also be done by increasing the earnings cap on wages subject to Social Security tax. This would affect high income workers who can best afford to pay more taxes. Also, Social Security benefits could be taxed like pension benefits. This would simplify tax rules and not affect low… READ MORE
Quoted Instructions for "Baby Boomers Retirement Obstacles" Assignment:
What impacts will the impending baby boomers retirement bubble have on public agencies such as social security, medicare, medical care and also on public personnel administration?
How to Reference "Baby Boomers Retirement Obstacles" Essay in a Bibliography
“Baby Boomers Retirement Obstacles.” A1-TermPaper.com, 2012, https://www.a1-termpaper.com/topics/essay/baby-boomers-retirement-obstacles/273583. Accessed 3 Jul 2024.
Related Essays:
Retirement Portability Term Paper
![Paper Icon](https://www.a1-termpaper.com/images/term-paper-3.png)
Retirement portability is a hot topic globally; as the economy forces job-hopping work life habits on more and more workers, it is necessary to be able to accrue funds for… read more
Term Paper 76 pages (20119 words) Sources: 0 Topic: Economics / Finance / Banking
Non-Western Comparative Politics Essay
![Paper Icon](https://www.a1-termpaper.com/images/term-paper-3.png)
Tanaka Kakuei Corruption
Chalmers Johnson, one of the U.S.'s foremost Japan experts, tells us the story of Tanaka Kakuei and the shocking extent of his corruption. But Johnson tells us… read more
Essay 5 pages (1391 words) Sources: 1 Style: MLA Topic: Government / Politics
Impact of Immigration on the United States Economy Research Proposal
![Paper Icon](https://www.a1-termpaper.com/images/term-paper-3.png)
Immigration
The Impact of Immigration on the United States Economy
Demographic Consequences:
American identity has historically centered on the ethnocentric proclivities of its ruling classes, which are generally constituted of… read more
Research Proposal 35 pages (10109 words) Sources: 20 Topic: Race / Ethnic Studies / Racism
Strategic Management Facebook Case Presentation Research Paper
![Paper Icon](https://www.a1-termpaper.com/images/term-paper-3.png)
Environmental Analysis
Technical trends
At the current time there are many different trends in the field of social networking technology. One of the most popular trends is associated with technologies… read more
Research Paper 20 pages (5597 words) Sources: 1+ Topic: Computers / IT / Internet
Age Discrimination Using Social Breakdown Labeling Theory Research Proposal
![Paper Icon](https://www.a1-termpaper.com/images/term-paper-3.png)
Elderly Care, Death and Dying Reflects Social and Cultural Breakdown and Age Discrimination
In America, especially early in the American history, it would not be unusual to walk into a… read more
Research Proposal 10 pages (2900 words) Sources: 15 Style: APA Topic: Family / Dating / Marriage
Wed, Jul 3, 2024
If you don't see the paper you need, we will write it for you!
We can write a new, 100% unique paper!