The 65+ population will grow to 80 million by 2028 – over 20% of the U.S. population will have entered this later life stages. A proportion of them will be affluent and have excess resources travel, entertainment, hobbies, and general consumption of nonessential goods and services. These lucky elders will be consuming at a rate comparable to younger affluent Americans.
A large proportion of 65+ Americans will either experience deep poverty or struggle to pay living expenses in the form of food, housing, and utilities. Despite Medicare benefits, medical expenses can consume a large share of a beneficiary’s income. Social Security generally does not provide enough income for living and medical expenses. Only a small number of workers are now reaching retirement age without adequate savings and monthly benefits through a 401K, Roth IRA, or an employer provided defined benefits program.
The inadequacy of retirement income requires some federal transfer of funds for medical care, housing, and SSI. However, these transfers are not nearly as robust as transfers of wealth through tax expenditures (tax cuts) for upper income individuals and corporations. As will be discussed throughout blog posts to follow this one, the elderly receive a rather minor proportion of budgeted expenditures each year.
Economists have ignored the realities of politics & economics pertaining to the 20% of Americans in the 65+ population. Far too many have bought into myths about the impact of Social Security and Medicare on the federal budget. Furthermore, the contribution of the this rapidly growing demographic subgroup to economic growth has not been balanced against transfers of wealth to them.