Study Offers a Rosy View of Graying Boomers’ Future

Graying baby boomers will not drive the country into bankruptcy as they retire and grow old, according to a research study issued Tuesday that offers an upbeat assessment of an aging America.

A growing economy filled with elderly people far healthier than previous generations and willing to work longer and save more should avoid an often-predicted national crisis, the study said.

It attempts to soothe concerns over the future of Social Security and Medicare, the two major benefit programs for the elderly, which consume about a third of the federal budget.

Even when the percentage of the population older than 65 rises to 20% in 2030, up from 13% now, programs such as Medicare and Social Security will be affordable, suggests the report, titled “Demography Is Not Destiny.”

“The word we should be focusing on is ‘challenge,’ not ‘crisis,’ ” said Robert Friedland, director of the National Academy on an Aging Society, which prepared the report.

The report projects that the country will be far richer in 30 years than it is now and thus “the public debate will essentially be about how to expend the additional wealth.”

The good news for the future, said the report, will be a manageable dependency ratio, which refers to the relative numbers of people too young or too old to work who must be supported by the working-age population. The problem was worse in the 1960s and 1970s, when masses of baby boomers were children, than it will be in the next 40 years, when many baby boomers will stop working.

The academy, which compiled the report by pulling together statistics and trend forecasts from various government and private sources, is a unit of the Gerontological Society of America, an association of experts on aging issues.

The report’s authors urged the press, politicians and public to avoid the sense of gloom that often accompanies much of the discussion of the baby boomers’ future.

Boomers, the 76 million persons born in the United States in the years 1946 through 1964, are members of the largest generation in American history. When they were young children, the big issue was building enough schools to handle their education. When they poured into the job market, the worry was whether they could find employment. When they began buying houses, real estate prices soared.

Now, with the oldest of the boomers just 13 years away from being eligible to collect full Social Security benefits, the debates are intensifying over how society will manage to finance their retirement and health needs.

Today’s elderly “are better educated, healthier and wealthier than the previous generation of elderly Americans,” the report said. “Future elderly are likely to be even better off and therefore they too will redefine ‘retirement’ and ‘old age.’ ”

The academy report does not challenge the economic assumptions upon which the federal government has projected that Medicare’s hospital trust fund will go bankrupt in 2010 and Social Security will be unable to pay all of its promised benefits in 2032.

Instead, it says that those programs will be affordable, although the government expects expenditures for Medicare and Social Security to increase by 167% in the years between 1998 and 2030.

“If society can afford these programs today at prevailing growth rates, there is little reason to suggest that society cannot afford them tomorrow,” the study said. If the value of the nation’s output of goods and services keeps growing in the future at the same rate as in the last generation--about 2.9% a year--there will be more than enough wealth to finance a 167% rise in outlays for Medicare and Social Security, according to the report.

However, it is far from clear how much of the income gains future voters would be willing to devote to expanded outlays by such government programs. Currently, there is aversion to any tax increases on the part of President Clinton and majorities in both houses of Congress.

Marilyn Moon, one of the report’s authors, said that American voters in the future will be willing to pay more taxes to support programs for the elderly. “As people become more aware of the needs, their willingness to share resources will be enhanced as well,” she said.

The often-overlooked dependency ratio was emphasized by the report as an encouraging figure. There are “fewer children and elderly relatives to people of working age than ever before,” the report said.

Because the proportion of children will be relatively low, the nation presumably will be able to shift resources from the young to the old without having to dig deeper into its collective pocket.

In 1960, there were 90 people of dependent age (0 to 19 and 65 and older) for every 100 workers between the ages of 20 and 64. Even in 2040, when the elderly’s share of the population will be far greater than it is now, there will be only 79 persons of dependent age for every 100 working-age Americans.