Group 6

Rafael Ramos Codeco

Paul Yu

Catherine Chien

Can Baby Boomers Confidently Retire with Social Security in the US?

SOCIAL SECURITY & MEDICARE

Started in 1935, Social Security Act. OASDI=OASI+ DI (Old Age, Survivors and Disability

Insurance) HI: Hospital Insurance (Medicare)

Payments to current recipients are funded mainly by taxes levied on current workers. By 2031 age 65+ are projected to 75 million. Beneficiary-to-worker ratio will rise from 35/100 in 2012 to

46/100 in 2030.

2014 SOCIAL SECURITY & MEDICARE TRUST FUND REPORTS

Since 2010, cost exceeded its tax income and projected to continue in the long run.

Financial challenges need to be addressed ASAP.

BABY BOOM GENERATION

Born in 1945~1964, Post–World War II 76 million persons life expectancy has risen gradually (79.86 at 2014)

Expectation of Retirement Enough money for living/housing Enough Coverage from Government

Decline Fertility Rate Worsen Crisis of Social

Security Deficit Elderly Dependency Ratio is

rising.

No. of employees are declining after 2010.

LOOK TO THE BRIGHT SIDE

Government: Raising the taxable earnings cap/tax rate Investing part of Social Security funds in equities Extending Social Security coverage Raising eligibility age (ex. from 65 to 68)

Retiree: A realistic retirement plan Reduce living expenses Choose a post-retirement career Carefully allocate assets Improve health condition

CONCLUSION

Elderly dependency ratio is rising declining fertility/life expectancy/baby boomer’s

retirement etc. Financial challenges of Social Security need to

be addressed ASAP. Baby boomers can confidently retire if

Improved financial situation of Social Security good investment strategy Set an acceptable/affordable standard of living Comprehensive retirement plan