LEARNING OBJECTIVES

• What key demographic changes will occur by 2030?

• What are the challenges facing Social Security and Medicare?

N

ancy, a 35-year-old new employee at a mar­keting and public relations firm, was flipping through the company’s benefits package. When it came to the retirement plan, she commented to the human resources person, “I guess I better pay atten­tion. I don’t think Social Security will be there for me when the time comes.”

Nancy isn’t alone. Many younger adults in the United States do not believe that Social Security or other government programs will be in existence by the time they get old enough to qualify for them. Demographic and financial trends support this pes­simistic view. As we will see, the baby-boom gen­eration, coupled with structural problems in Social Security and Medicare, give young adults good reasons to be concerned.

Demographic Trends: 2030

In Chapter 1, we noted several trends in the popula­tion of the United States and the rest of the world during the upcoming century. These trends are not likely to change in the foreseeable future. Changes in the composition of the older adult population contribute to potentially critical issues that will emerge over the next few decades. One especially important area concerns the potential for intergen­erational conflict.

Because the resources and roles in a society are never divided equally among different age groups, the potential for conflict always exists. One well – known intergenerational conflict is that between adolescents and their parents. Less well known is the potential for conflict between middle-aged and older adults. This type of conflict has not t raditionally been a source of serious problems in society, for several reasons: Older adults made up a small proportion of the population, family ties between adult children and their parents worked against conflict, and middle-aged people were hesi­tant to withdraw support from programs for older adults. Despite these potent forces protecting against conflict, the situation is changing. For example, the controversy over the rate of growth of Medicare and Social Security that has created heated political debates about social support programs and health care in the late 1990s and 2000s would have been unthinkable just a few years earlier.

To see more clearly how these changing demo­graphics will have an enormous effect on society at large and on the programs that target older adults, let us project forward to the year 2030, when the last of the baby boomers will have reached age 65. Between now and 2030, the following changes will have set in:

• The proportion of older adults in the United States will have nearly doubled.

• Older adults will be much more politically sophisticated and organized. They will be better educated and will be familiar with life in a highly complex society in which one must learn to deal with bureaucracies. And they will be proficient users of the Internet and technology in general.

• Older adults will expect to keep their more affluent lifestyle, Social Security benefits, health care benefits, and other benefits accrued throughout their adult life. A comfortable retirement will be viewed as a right, not a privilege.

• The ratio of workers to retirees will fall from its current level of roughly over 3:1 to 2:1. This means that to maintain the level of benefits in programs such as Social Security, the working members

of society will have to pay significantly higher taxes than workers do now. This is because Social Security is a pay-as-you-go system in which the money collected from workers today is used to pay current retirees. Contrary to popular belief, Social Security is not a savings plan. Whether policymakers will make the necessary changes to maintain benefits that citizens came to view as entitlements remains to be seen.

• The increase in divorce that has occurred over the past few decades may result in a lowered sense of obligation on the part of middle-aged adults toward parents who were not involved in their upbringing

Successful Aging 533

or who the adult child feels disrespected the other parent. Should this lowered sense of obligation result, it is likely that fewer older adults will have family members available to care for them, placing a significantly greater burden on society for care.

• The rapid increase in the number of ethnic minority older adults compared to white older adults will force a reconsideration of issues such as discrimination and access to health care, goods, and services, as well as provide a much richer and broader understanding of the aging process.

No one knows for certain what society will be like by 2030. However, the changes we have noted in demographic trends suggest a need for taking action now. Two areas facing the most challenge are Social Security and Medicare. Let’s take a look at these to understand why they face trouble.