Boomers at 65
2011 has finally arrived -- the year the baby boomers turn 65! In Australia we expect 210,000 people to have their 65th birthday this year with more than 80% of them expected to fill out an application for the Age Pension and the Heath Care Card for the first time.
Over the next five years, there will be 30% more people turning 65 than there were over the previous five years. This big increase originates from the return of soldiers after the Second World War and the catch up and acceleration in fertility starting from 1946. It also includes a huge increase in immigration which occurred in the early 1950s and brought already born children as well as workers to grow the economy.
The United States is also bracing itself for significant budgetary and political implications of accelerated ageing. According to an article in this week's Economist, the cost of the current generous US Medicare and Social Security programs which kick in at age 65 or thereabouts, will grow from 8.4% of GDP in 2010 to 11.2% by 2030. The Economist writes ‘The pensioner-worker imbalance and health care inflation will send the budget deficit into the stratosphere’ – it was already a problem from GFC spending.
The political implications in the US arise from the voluntary voting system there and a tendency for people to become more activist and conservative as they enter post-65 age brackets. They are becoming active opponents to expansion of health care benefits to younger voters for fear of later cutbacks to their own pension and health benefits. Between 2000 and 2010 the percentage of those aged 65 and over who voted Republican increased from 47% to 59%. What political implications will we see in Australia?
Posted Sunday, 16 January 2011
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