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The problem with getting old



Published: Tue, April 9, 2002 @ 12:00 a.m.



For more than a few years, there's been talk in the United States about the effect of changing national demographics.

Generally, this talk has been tied to how people are having fewer children, retiring earlier and living longer. Specifically, much of the focus has been on how the demographic pig in the python -- the baby boomers -- will affect the national economy as they reach retirement age. That time isn't very far away. Early boomers in 30-and-out jobs have already retired.

In the United States, the ratio of workers paying Social Security taxes to retirees receiving benefits is getting perilously lopsided. There were 16.5 workers for each Social Security recipient in 1950. Today there are only slightly more than three workers per recipient and by some projections, that could drop to 2-to-1 over the next generation.

Congressional committees and think tanks of every conceivable political stripe have been grappling with the issue, presenting proposals that promise varying degrees of success.

Now comes word from the U.N. World Assembly on Aging in Madrid that the United States is not alone.

In the words of the conference, a "revolution in longevity" powered by medical advances in the 20th century has worldwide implications. An aging population will make unprecedented demands on society, ranging from ensuring adequate pensions, housing and health care to protecting the elderly from discrimination and abuse.

Projected peak: Delegates from 160 countries and international organizations are trying to come up with solutions for a global problem that is projected to peak at mid-century (the United States is slightly head of the curve).

Globally, the population of people 60 and older is growing by 2 percent each year, considerably faster than the population as a whole, according to the latest U.N. statistics.

While the United States is anticipating a worker-to-retiree ratio as low as 2 to 1 in 2030, the U..N. projections show the ratio dropping from 9-to-1 now to 4-to-1 in 2050.

These figures have enormous social, political and economic implications.

The smaller number of workers won't be able to carry a tax burden high enough to support the aging population. At the same time, aging members of the society who have amassed savings will begin using them, which will reduce the capital needed for economic expansion.

There's one obvious, and very unpopular, answer looming: delayed retirement. While the U.S. Congress has begun making moves in that direction, it has not done so in direct proportion to the increased longevity enjoyed by Americans. Social Security initially anticipated modest retirement payments averaging a few years per recipient, not a few decades.

And while making the necessary corrections may not be politically popular now, they're going to have to be made before it's too late.




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