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Are Retiring Baby Boomers Putting a Strain on the System?


The baby boomers – the generation of people born after WWII who are now somewhere between 50 and 70 years old – represent one of the largest generations alive today. As they age, they require care, including access to entitlement programs set aside for retirees. Is the vast population straining the system, and will this impact future generations? Some say it just might.


Fewer Workers to Provide Support

The biggest shift caused directly by the retirement of so many baby boomers is a lack of workers available to provide support to the elderly. Over the last 30 years or so, the number of people retiring as compared to the number of people still working hasn’t changed much. This number is referred to as the old age dependency ratio, and it shows just how many workers are out there caring for the elderly.

In 2017, things started shifting rapidly. For every 100 Americans in the prime of their working years, there were 25 people who were of retirement age or older. By 2030, the Census Bureau estimates that this number will climb to 35 for every 100, and by 2060, 42 for every 100. This age distribution will inevitably cause issues in the future, particularly when it comes to entitlement programs like pensions and Social Security.  


The Surge of Retirees

We have known that there would be a huge surge of people retiring as the baby boomers aged, and this actually started in 2011 when the youngest of the generation started turning 65. Every day across the country, 10,000 new baby boomers reach this magical number. Thanks to low birth rates that started in the 70s, the working age population that supports the elderly continues to grow thinner. In fact, right now represents the lowest birth rates on record in the US, 2017 had the fewest births on record for more than 30 years. Though there was a boom of immigration, it did very little to help. Now, the US is faced with what very well could turn into a crisis.


Social Security and Entitlement Programs

There is also evidence to suggest that senior citizens in the US will continue to feel the financial strain associated with retirement for many years to come. In fact, the trustees responsible for the Social Security system said earlier in the year that they are dipping into their trust fund to pay benefits right now – the first time since 1982 this has happened. Employee pensions are also growing costlier, and this is causing states to cut out other funding for things like healthcare and education. In 2016, it was estimated that state liabilities were $4 trillion collectively. Unfortunately, those states only had $2.6 trillion in assets. This gap continues to widen, as well, and without a new budget in place, things will only worsen in the future.

The number of people actively contributing to entitlement programs today cannot keep up with the number of people retiring, and the age gap will continue to climb. Budgeting is in order, and without it, neither state nor federal governments will have the assets needed to provide today’s working Americans to the pensions and Social Security to which they are entitled.

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