Baby-Boomer Retirement - Essay Example

Therefore the longer the working duration and the larger the number of earnings made, the higher the benefits received. Social security is, therefore, a vital part of a workers retirement plan. After World War II, birth rates in the world tremendously increased. Statistics show that about 64million American children were born in the US during this period. The kids that were born between the years 1946 and 1964 were referred to as baby boomers. The large economic growth in the 90s is attributed to the boomers.

In 2004, U.K boomers controlled 80% of U.K’s wealth. The majority of the workforce today is represented by this group (Walker, 2004). Social security fund is designed in such a way that the benefits retirees of today get are paid from the contributions received from today’s working population. Over the years, the beneficiary to working population has been sustained because fewer people were retiring as compared to the number of people entering the workforce; thus the system was able to accumulate more revenues.

Increase in life expectancy and the decrease in birth rates has posed a threat to the beneficiary-worker ratio; few people are now joining the workforce as compared to the many who are almost retiring. In 1935, the year when social security funding was formulated, the life expectancy of a 65-year-old was 12.5years; in 2012 it had risen to 17.9 years and is projected to rise to 19.5 by the year 2030.The National Academy for Social Insurance projects that the beneficiary to worker ratio will rise to 46 percent by 2030.

 There are fears that the massive onset of the boomer's retirement may bankrupt the system. This is because the surplus contributions made over the years will be used in paying out their benefits.