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How Will Boomers Affect Social Security?

Social Security faces a financial challenge from the impending retirement of the largest generation in American history, the 76 million persons born in the “baby boom” years, from 1946 through 1964. Boomers began to reach age 62 in 2008. The cost of Social Security will rise faster than tax income because the population over age 65 will grow faster than the working-age population. Both the baby boom generation and increasing life expectancy after age 65 contribute to an aging population. When Social Security began in 1935, life expectancy at age 65 was 12.5 years. In 2012, it was 20.4 years for women and 17.9 years for men. By 2030, it is projected to be 21.7 for women and 19.5 years for men. But these gains in life expectancy are not shared evenly throughout the population, with less-advantaged groups generally seeing smaller increases in life expectancy. While the number of beneficiaries will grow, tax rates remain unchanged in current law.

By 2031, when the youngest boomers will have reached 67, Americans age 65 and older are projected to number 75 million, nearly doubled from 39 million in 2008. The beneficiary-to-worker ratio, which compares the number of people drawing benefits to the number of workers paying into Social Security, will rise from 35 per 100 in 2012 to 46 per 100 in 2030. 

Even as the boomers retire, Social Security costs are projected to rise only slightly, because the retirement age increase and other cuts enacted in the 1980s have already reduced benefits. The next section explores how Social Security spending compares to the size of the economy over time.

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