The macro-economics of aging over the next 40 years do not look great: the first Baby Boomers reached the age of Social-Security eligibility 15 months ago, but the crest of this so-called ‘Silver Tsunami’ will not come until about 2030. It will not recede for another couple of decades. The issue is not the number of people so much as the economy’s ability/preparation to deal with the number. According to the Employee Benefit Research Institute, “The baseline 2010 Retirement Readiness Rating™ finds that nearly one-half (47.2 percent) of the oldest cohort (Early Baby Boomers) are simulated to be “at risk” of not having sufficient retirement resources to pay for “basic” retirement expenditures and uninsured health care costs. The percentage “at risk” drops for the Late Boomers (to 43.7 percent) but then increases slightly for Generation Xers to 44.5 percent.”
The combination of retiring Boomers with lengthening life expectancies with a general political trend to cut taxes for all while reducing services only to the poor has meant that the costs of long-term care are growing, while the will to adjust expectations or fund federal programs is shrinking. The FY2013 budget proposed by Senators Rand Paul (R-Kentucky), Jim DeMint (R-South Carolina), and Mike Lee (R-Utah) earlier this month has not much quelled fears of how Medicare will deal with the spread between long-living retired Boomers and the costs they will impose on an already stressed healthcare ‘system’.