Saturday, September 29, 2012

Report: Long-Term Implications of Aging Population on United States

In a congressionally-mandated report on the aging of the U.S. population and its economic consequences for the country, particularly for federal programs that support the elderly, the National Research Council finds that Social Security, Medicare, and Medicaid are on unsustainable paths, and the failure to remedy the situation raises a number of economic risks. However, "Aging and the Macroeconomy: Long-Term Implications of an Older Population" also looked at issues about working and retirement and reports that:
  • there is substantial potential for increased labor force participation at older ages, which would boost national output, slow the draw-down on retirement savings, and allow workers to save longer; and
  • longer working lives would have little effect on employment opportunities for younger workers, productivity, or innovation.
According to Ronald Lee, professor of demography and economics at the University of California, Berkeley, and co-chair of the committee that authored the report, "[t]he nation needs to rethink its outlook and policies on working and retirement.... Although 65 has conventionally been considered a normal retirement age, it is an increasingly obsolete threshold for defining old age and for setting benefits for the elderly."

In addition, the report suggests that workers can better prepare for retirement by planning ahead and adapting their saving and spending habits.

A summary of the report is also available.

Source: National Research Council News Release (September 25, 2012)

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