Question

As the baby boom generation retires, the ratio of retirees to workers will increase noticeably. How will this affect the Social Security program? How will this affect the standard of living of the average American?

a) The Social Security program will be strengthened, and the standard of living will improve.
b) The Social Security program will face challenges, and the standard of living may decline.
c) The Social Security program will remain unaffected, and the standard of living will improve.
d) The Social Security program will be phased out, and the standard of living will stay the same.

Answer 1

The retirement of the baby boom generation will increase the ratio of retirees to workers, challenging the Social Security program and potentially leading to a decline in the standard of living for the average American.

Step-by-step explanation:

As the baby boom generation retires, the ratio of retirees to workers will increase, leading to challenges for the Social Security program. This demographic shift means that there will be fewer workers to support a growing retiree population, putting financial strain on the Social Security system due to lesser contributions from payroll taxes and higher outgoings in benefits. Consequences may include the need for policy changes such as increased payroll taxes, a raised retirement age, or reduced benefits. These factors could thereby affect the standard of living for the average American, potentially leading to a decline if retirees have lower income security and workers face higher tax burdens to support the system.