Baby_Boomers

As the retirement age for baby boomers approaches, there are vast changes that society and the individual boomer must expect and plan for. The boomers decision to continue to work will not only affect their home life but will create a stress on the financial state of the country’s economy and the current labor market. With the delicate state of the economy, it is in the best interest of everyone to take the necessary steps to avoid anything from disrupting it. Demographers define the baby boom as a birth surge started in 1946 after World War II and reached its peak in 1957. It continued until 1964 because of postwar prosperity (Schaie & Willis, 2002). There two groups of baby boomers. The babies born from 1946 to 1955 were called early boomers. Those who were born from 1956 to 1964 were called as late boomers. We are just about to see the initial effects of the first wave of baby-boomers retiring. The manner in which this will affect the economy is extremely hard to predict, especially in the U.S. where the systems of health care and social security are based on intergenerational exchanges--the current workforce provides the funding for preceding generation (Schaie & Willis, 2002). The strain of a greater number of retiring and aging citizens on an economic system that is unprepared with safety-nets could be catastrophic for the working class generations who are coming up behind them and are going to have to somehow keep the economy propped up on increasingly shaky legs. Adding to the difficulties of the economy, the ratio of retirees to workers; the ratio of the number of people ages 65 and over to the number of ages 20 to 64 will increase from 20% to 41%. With the smaller pool of younger workers, the U.S. will face a labor shortage of up to 10 million workers by 2050 (U.S. Department of Health and Human Services, 2005). With that being said, what can be done to avoid such devastation' If boomers remain vigorous and healthy as they age, they could make tremendous contributions to American society. For example, they could remain in the workforce. If large numbers of boomers remain in the workforce, they will give a significant boost to economic growth. According to Peter Francese, founder of American Demographics magazine and a demographic trends analyst for the Ogilvy and Mather advertising agency, “even if 5 million baby boomers work instead of retiring, at an average wage of about $50,000 a year, that would add $250 billion to the economy every year". Also, with the increase in life expectancy, boomers who retire at 65 will need to have enough money to support themselves for 20 to 25 years (U.S. Department of Health and Human Services, 2005). A recent AARP survey, "Boomers at Midlife," found that nearly 80% of boomers intend to keep working beyond age 65 because they have not saved enough to retire. David DeLong, DBA, a researcher at MIT's AgeLab and the author of Lost Knowledge: Confronting the Threat of an Aging Workforce, expects that employers eventually will welcome boomers back into the workforce because they will reach a point where they will realize that there aren't enough young, skilled workers. As a result, according to DeLong, companies will get creative about recruiting older workers to fight to retain the small pool of labor available. The need for skilled workers would cause wages to increase and unemployment would be fairly low. However, this does not solve the problem of taxes having to be quite high to pay for all the services that seniors require such as government pensions and Medicare. One solution according to Francese is for younger generations, as well as soon to be boomers, to get involved in individual investments and retirement planning. These options may yield better results and lessen the burden on Medicare and Social Security for next 30 years. Facing the retirement of baby boomers is inevitable. If society and the individual boomer are not prepared, then the next 30 years of the economy and job market will suffer severe loss and despair. Luckily, we still have time to prepare ourselves to avoid such consequences. We must take the necessary steps to protect our delicate economy and future.   References AARP Survey, "Boomers at Midlife 2004." DeLong, D. (2004). Knowledge: Confronting the Threat of an Aging Workforce. New York, NY: Oxford Press, Inc. Francese, P. (2004). Can America Afford to Grow Older' WebMD.com retrieved on November 24, 2011 from www.webmd.com. Schaie, K. W. & Willis, S. L. (2002). Adult development and aging. (5th ed.). Upper Saddle River, N. J.: Prentice Hall, Inc. U.S. Department of Health and Human Services, United States, 2005.