SOCIAL SECURITY HITS FIRST WAVE OF BOOMERS
October 9, 2007
With the first recognized baby boomer retiring and signing up for Social Security benefits, a symbolic jump toward the retirement system's looming bankruptcy has been made, says USA Today.
- The first wave of 3.2 million baby boomers turns 62 next year -- 365 an hour.
- About 49 percent of the men and 53 percent of the women are projected to choose early retirement and begin drawing monthly Social Security checks representing 75 percent of the benefit they'd be entitled to receive if they waited four more years to retire.
- In 2011, they'll turn 65 and be eligible for Medicare; in 2012, those who didn't take early retirement benefits will turn 66 and qualify for their full share.
- Social Security's caseload will have increased from 50 million people today to 84 million people in 2030.
- Medicare will go from 44 million beneficiaries to 79 million.
- That will leave barely more than two workers paying payroll taxes for every retiree.
It's a coming financial implosion that Washington hasn't mustered the will to confront, says USA Today:
- Fixing Social Security solely with higher taxes or cuts in spending would mean a 16 percent increase in the payroll tax or a 13 percent cut in benefits.
- Medicare's needs would be far greater: a 122 percent payroll tax hike or a 51 percent reduction in spending, just for hospital care.
Each year action isn't taken, the prognosis gets worse and the cure more expensive. It's "the power of compounding," says David Walker, the nation's comptroller general. "Right now, it's working against us."
Source: Richard Wolf, "Social Security hits first wave of boomers," USA Today, October 9, 2007.
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