“Challenge for the USA, the retirement of the baby boomers.”
La Nacion reports on another reason why it is probably late in the cycle for the United States: the country has obligations it cannot meet. The first baby boomer, a woman named Kathleen Casey – who was born on January 1, 1946 – will turn 62 in three months. If we read the article correctly, she’ll be able to begin to collect Social Security. Behind her are 84 million others, almost every one of them counting on getting something from the government – either Social Security, Medicare or Medicaid.
“How about you, Bill?” asked a friend last night. “Are you going to go for partial payments at 62…or wait until 65 to get the whole enchilada?”
We had never thought about it. We always assumed that we would get nothing at all. And we still can’t quite imagine that we will get anything. Anyway, we don’t need it…and don’t really want it. But we have a few years to go before we’ll be ready to apply; who knows what will happen?
The problem looming up with baby boomers’ retirement is a mathematical one. When the Social Security system was set up, there were 42 people working for every one who was getting benefits. In 2030, when the boomers are drawing their cheques, the ratio will fall to 2 to 1. The system will go broke. Everyone knows it.
Obviously, benefits will be cut – either by act of Congress…or by act of inflation. The latter is our guess.
The Daily Reckoning Australia