Question

The Baby Boomers have begun to retire and will continue to do so in increasing numbers through about 2030. The retired have a very different saving rate than people in the middle years of their careers. Apply the theory of supply and demand to financial markets to predict the likely impact on interest rates of the Baby Boomers retiring.

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Answer 1

Ans :The Baby Boomers have begun to retire and will continue to do so in increasing numbers through about 2030 , this can be said from: After the Social Security faces a economic challenge from the retirement coming of the large generation in American history, and also 76 million people born in the “baby boom” years, between 1946 and 1964. Then Boomers starts to reach age 62 in 2008. The Price of Social Security will lncrease more faster than tax income because the population over age 65 will lncrease faster than the working-age Community.And both the baby boom generation and also the increasing life expectancy after age 65 give to an aging population.

And when Social Security starts in 1935, life expectancy at age of 65 year was an another additional 12.5 years also. In 2016, it was an extra 20.7 years for women and 18.2 years for men.And by the 2030, it is extended to be 21.6 for women and 19.2 years for men. At Because of this,the gains in life expectancy are not given evenly throughout the population, and also with less-advantaged groups generally looks smaller increases in life expectancy. but the number of receiver will grow, but the tax rates remain unchanged.

And by 2031, when the smallest boomers will have outreach67, the Americans with age 65 and older are extended to 75 million, therefore they nearly doubled from 39 million in 2008. The beneficiary-to-employee ratio, which compares the number of people attain benefits to the number of employee paying into Social Security, will lncrease from thirty five per 100 in 2014 to forty four per 100 in 2030.

And even when the boomers retired, Social Security price are extended to lncrese only slightly, because the retirement age grows and other cuts approved in the 1980s have already decreased benefits. The next part examine how Social Security compares expend to the size of the economy over time.

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