notification of the reductions should be made as early as possible so those affected can have time to adjust their retirement planning accordingly.
Faced with the prospect of changes to retirement plan provisions, many workers will probably prefer lower early retirement benefits rather than pushing back the age at which retirement can commence. While its implementation is still a number of years away and may not be fully understood by those that will be affected, there has been very little outcry about the increase in the Social Security normal retirement age after the turn of the century. This will mean lower initial benefits than they would otherwise receive for the workers affected who want to retire early, but it will not preclude them from getting their Social Security benefits at the same age as their parents could.
The crucial issue in determining whether our social insurance system can survive is what happens to Medicare. The projections reported earlier suggest the elderly would make a significantly larger claim on national resources in the form of medical care as the baby boom reaches retirement age. If this is to occur, other claims on national resources are going to have to be reduced. Since Medicare is run through the public fisc, it is likely that significant increases in Medicare commitments will bring into question public commitments to other programs, raising the potential that our commitment to the elderly could crowd out our commitments to other segments of our society.
It is impossible to predict at this time what our public appetites for national defense, foreign aid, etc., might be 25 or more years from now. We might indeed be willing at that time to reduce other national commitments, especially to the extent they are commitments to individuals or countries outside our own borders. But a large share of our other national commitments is to individuals and programs that benefit other segments of our own society directly.
Reducing public commitments of educational investment in our youth, or decreasing the investment in our national infrastructure, so we can provide ever more expensive health procedures that extend the life of the elderly but that may not improve their overall life satisfaction will pose difficult dilemmas for our policy makers. The projected public cost of providing health care for the elderly and for society in general after the turn of the century suggests that the structure of our health care system will need to change. If it does, it will influence the Medicare commitments.
In the final analysis, it would not appear that the shift in resources required to meet the general needs of the elderly in the future will be so large that we cannot make the marginal adjustments needed to maintain our existing cash benefits retirement program. The Medicare program, on the other hand, would seem to be on a long-term cost path that is not sustainable. This latter problem is only one element in the larger health care dilemma the U.S. now faces.
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Book title: Demography and Retirement:The Twenty-First Century. Contributors: Anna M. Rappaport - Editor, Sylvester J. Schieber - Editor. Publisher: Praeger Publishers. Place of publication: Westport, CT. Publication year: 1993. Page number: 148.