The Beginning of the End, First Baby Boomer to Retire Soon

Kathleen Casey-Kirschling, was born in Philadelphia on Jan. 1, 1946 at 12:00:01. Why is this so important? To some it may not be but to the baby boomers, she is generally recognized as the nation’s FIRST Baby Boomer!

USA Today recently did an article on Kathleen. They stated that she has just signed up for Social Security benefit that will begin this coming January. The author of the article states ”it will represent one small step for her, one giant leap for her baby boom generation — and a symbolic jump toward the retirement system's looming bankruptcy.” ¹

The growing concern for the Social Security system and the financial refuge of that system is now knocking at the door louder and louder. Although the system will not go bankrupt with Kathleen’s inclusion to the retirement force it is estimated that 80 million baby boomers will be retiring with in the next 22 years and by that time the Social Security system will be bankrupt unless major reform takes place.

By the time this author retires, which with the increase in age will not be until I am 67 for full benefits and that year will be 2027 (yes I am of one of the last baby boomer generations, born in 1960), the Medicare benefits will be drained, the social security benefits will be on the verge of drying up all together. Medicare's hospital insurance fund now pays out more than it takes in. Barring action by Congress, Social Security will start doing so in 2017. In 2019, the hospital insurance fund is projected to run out of funds. In 2041, the Social Security Trust Fund will run dry.

With each passing year the problem goes unsolved and no actions taken by congress to really remedy the situation. The forecast is bleak at best. Both Democrats and Republicans both agree on one thing. The Social Security system is on shaky ground, it must be changed and they must do it together.

In 2003 and 2005 The President and Congress cut taxes. Everyone wants to pay less taxes, but in fact by doing so there is less money or revenue for the country to pay obligations and promises to future retirees. Congress added $768 billion over 10 years to Medicare in 2003 by creating a prescription-drug benefit. Two years later, Congress cut Medicaid's projected cost by $5 billion over five years, but the Congressional Budget Office still projects the program to grow by about 8% a year.

President Bush tried to revamp Social Security and create private investment accounts in 2005 but was blocked by Democrats, who said it would drain money from the Social Security Trust Fund. The President’s administration renewed an effort to charge upper-income seniors more for Medicare's prescription-drug coverage. This is the plan Congress ignored earlier this year.

Three commissions have been proposed to study the issue, recommend changes and, in two cases, force Congress to vote.

The imbalance between workers and beneficiaries didn't happen overnight. In 1945, a decade after Social Security was created, there were 42 workers paying into the system for each retiree. Today, there are three.

For those of us that are the last of the baby boomer generation, it looks pretty bleak as far as being able to enjoy the products of our hard work with benefits from Social Security. For Kathleen and those of the first generation, the benefits will be there but as our government continues down the path of spending more than it takes in, at some point the obligations to pay will be far greater than the funds available.