22 Facts About The Coming US Demographic Shock Wave

Tyler Durden's picture

Submitted by Michael Snyder of The Economic Collapse blog,

Today, more than 10,000 Baby Boomers will retire.  This is going to happen day after day, month after month, year after year until 2030.  It is the greatest demographic tsunami in the history of the United States, and we are woefully unprepared for it.  We have made financial promises to the Baby Boomers worth tens of trillions of dollars that we simply are not going to be able to keep.  Even if we didn't have all of the other massive economic problems that we are currently dealing with, this retirement crisis would be enough to destroy our economy all by itself.  During the first half of this century, the number of senior citizens in the United States is being projected to more than double.  As a nation, we are already drowning in debtSo where in the world are we going to get the money to take care of all of these elderly people?

The Baby Boomer generation is so massive that it has fundamentally changed America with each stage that it has gone through.  When the Baby Boomers were young, sales of diapers and toys absolutely skyrocketed.  When they became young adults, they pioneered social changes that permanently altered our society.  Much of the time, these changes were for the worse.

According to the New York Post, overall household spending peaks when we reach the age of 46.  And guess what year the peak of the Baby Boom generation reached that age?...

People tend, for instance, to buy houses at about the same age — age 31 or so. Around age 53 is when people tend to buy their luxury cars — after the kids have finished college, before old age sets in. Demographics can even tell us when your household spending on potato chips is likely to peak — when the head of it is about 42.


Ultimately the size of the US economy is simply the total of what we’re all spending. Overall household spending hits a high when we’re about 46. So the peak of the Baby Boom (1961) plus 46 suggests that a high point in the US economy should be about 2007, with a long, slow decline to follow for years to come.

And according to that same article, the Congressional Budget Office is also projecting that an aging population will lead to diminished economic growth in the years ahead...

Lost in the discussion of this week’s Congressional Budget Office report (which said 2.5 million fewer Americans would be working because of Obamacare) was its prediction that aging will be a major drag on growth: “Beyond 2017,” said the report, “CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades [due in large part to] slower growth in the labor force because of the aging of the population.”

So we have a problem.  Our population is rapidly aging, and an immense amount of economic resources is going to be required to care for them all.

Unfortunately, this is happening at a time when our economy is steadily declining.

The following are some of the hard numbers about the demographic tsunami which is now beginning to overtake us...

1. Right now, there are somewhere around 40 million senior citizens in the United States.  By 2050 that number is projected to skyrocket to 89 million.

2. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

3. One poll discovered that 26 percent of all Americans in the 46 to 64-year-old age bracket have no personal savings whatsoever.

4. According to a survey conducted by the Employee Benefit Research Institute, "60 percent of American workers said the total value of their savings and investments is less than $25,000".

5. 67 percent of all American workers believe that they "are a little or a lot behind schedule on saving for retirement".

6. A study conducted by Boston College's Center for Retirement Research found that American workers are $6.6 trillion short of what they need to retire comfortably.

7. Back in 1991, half of all American workers planned to retire before they reached the age of 65.  Today, that number has declined to 23 percent.

8. According to one recent survey, 70 percent of all American workers expect to continue working once they are "retired".

9. A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.

10. A study by a law professor at the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States.  Back in 2001, they only accounted for 12 percent of all bankruptcies.

11. Today, only 10 percent of private companies in the U.S. provide guaranteed lifelong pensions for their employees.

12. According to Northwestern University Professor John Rauh, the total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have accumulated is 4.4 trillion dollars.

13. Right now, the American people spend approximately 2.8 trillion dollars on health care, and it is being projected that due to our aging population health care spending will rise to an astounding 4.5 trillion dollars in 2019.

14. Incredibly, the United States spends more on health care than China, Japan, Germany, France, the U.K., Italy, Canada, Brazil, Spain and Australia combined.

15. If the U.S. health care system was a country, it would be the 6th largest economy on the entire planet.

16. When Medicare was first established, we were told that it would cost about $12 billion a year by the time 1990 rolled around.  Instead, the federal government ended up spending $110 billion on the program in 1990, and the federal government spent approximately $600 billion on the program in 2013.

17. It is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

18. At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for every single household in the United States.

19. In 1945, there were 42 workers for every retiree receiving Social Security benefits.  Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

20. Right now, there are approximately 63 million Americans collecting Social Security benefits.  By 2035, that number is projected to soar to an astounding 91 million.

21. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

22. The U.S. government is facing a total of 222 trillion dollars in unfunded liabilities during the years ahead.  Social Security and Medicare make up the bulk of that.

So where are we going to get the money?

That is a very good question.

The generations following the Baby Boomers are going to have to try to figure out a way to navigate this crisis.  The bright future that they were supposed to have has been destroyed by our foolishness and our reckless accumulation of debt.

But do they actually deserve a "bright future"?  Perhaps they deserve to spend their years slaving away to support previous generations during their golden years.  Young people today tend to be extremely greedy, self-centered and lacking in compassion.  They start blogs with titles such as "Selfies With Homeless People".  Here is one example from that blog...

Selfies With Homeless People

Of course not all young people are like that.  Some are shining examples of what young Americans should be.

Unfortunately, those that are on the right path are a relatively small minority.

In the end, it is our choices that define us, and ultimately America may get exactly what it deserves.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
TahoeBilly2012's picture

The American Baby Boomer. The "Fonz" is a Jew! There is your future, thats right..the Winkler's are Jews, not Northern Italian's looking cool..... Picture it over and over and over. It may sink in yet.

Rafferty's picture


DblAjent's picture

Uh, those who "went Galt" were the nonconformists, the movers, the shakers, the economy makers. And when the fascists restricted them and nationalized their innovations, they shut it all down and got out'a Dodge.

This upcoming generation resembles none of that, nor are they cut from a cloth with any thread of integrity, accountability, responsibility or motivation other than to coddle and serve themselves.

TBT or not TBT's picture

Logan's Run is the next iteration after Death Panels? I mean, what the hell, Atlas Shrugged has apparently been used as a how-to guide for our grinding tyranny. What's next?

new game's picture

financial ruin and chaos into all out war. (repeat) 1942 to 2014-15 time frame. actually overdue.

The fed has prolonged this by creation of debt and mic to keep intact for last 20 years.

it will be epic i do say. wwIII and nowhere to hide...

Chaos_Theory's picture

More like 1914 = 2014

just different geography

boogerbently's picture

Remove the "cap", push retirement back to 67.....YAWN.....next.

If you're serious, remove illegals, students and Disability from the "pie".

FreedomGuy's picture

Remove collectivism from America, disempower statism. Yawn! All problems solved. All generations can be friends. Immigrants can be welcomed, once again. Students actually have to take out their own loans and pay them back.

boogerbently's picture

I'm sorry.

I thought we were looking for REALISTIC solutions.

You know, ones that actually HAVE a chance in HELL of being implemented.

pods's picture

There is no solution that does not involve a whole lot of suffering. 

A whole lot.

We cannot even default on all our debt and come close to fixing this thing.  

17 Trillion versus 200+ Trillion (and growing by the second)?  

Doesn't matter what they want to implement, it is going to crash.  And burn.


TBT or not TBT's picture

Skynet could gain consciousness and decide our fate instead.

new game's picture

a whole lot!!!!!!!!!!!!!!!!!!!!!!!

FreedomGuy's picture

I was re-reading your post. I assume you are talking about unfunded liabilities along with debt. Your point is subtle but very true. If you waved a magic Fed wand and eliminated the entire debt today it would reappear very quickly. The underlying economic mismatch of outlays versus revenues is still there and still accelerating

This is why I stand by my assertion that collectivism has to be defeated. All other solutions are temporary.

FreedomGuy's picture

Actually, you need to read up on current events. They already have raised the Social Security age for collection. The problem is that this is actually not the same as changing the retirement age. You will have a gap now between retirement and SS collection. This will simply create a new problem with new government interventions, particulary given the small to nonexistant savings most boomers have at this point.

You can implement all the government solutions you want. They just change the nature and usually increase the size of the problem. First rule of government is that all problems caused by government require more government which is to say more government power and money.

Miffed Microbiologist's picture

"This will simply create a new problem with new government interventions, particulary given the small to nonexistant savings most boomers have at this point."

I think I know the answer to this. They are hoping a significant number will simply die without collecting benefits. I am amazed how incredibly unhealthy the boomer generation is compared to their parents. Massive amount of diabetes and it's complications. People on over 25 different meds. Healthcare costs alone will quickly eat away any retirement. The cost is so great it's impossible to save enough. I've read it is now recommended to have over $200k saved just for healthcare costs alone when someone retires today! The math doesn't work. So the only choice is to deny care or rob from others to pay for it. Frankly, I'm betting they do both.


boogerbently's picture

 "the only choice is to deny care or rob from others to pay for it."

You just defined obamacare !

zhandax's picture

@ pods  "There is no solution that does not involve a whole lot of suffering."

Actually, there is no solution that does not involve a whole lot of discipline, which is a a much harder sell.  There is such a thing as short-term suffering.  There is no such thing as short-term discipline.

Tortfeasor's picture

There is such a thing as short-term suffering. There is no such thing as short-term discipline.

I'm quoting that from now on.

FreedomGuy's picture

You may be right. However, the key is to have boomers die BEFORE they collect Medicare and even SSecurity.

Frankly, it should be worrisome to seniors when it is beneficial to the State that you die immediately upon turning 65...unless you are  wealthy net taxpayer, still.

It is still a probem of collectivism.

Professorlocknload's picture

Sign at the Forest Service ranger station. "Please don't feed the wild animals. They will become dependent and not learn to fend for themselves."

Statism is not the natural order of things. As you say, it should be dropped now, but too many voting animals rely on it now.

Of course, in the end, nature reverts, then the State must pretend to feed us, and we pretend to be fed.

FreedomGuy's picture

The old Soviets used to have a saying, "You pretend to pay me and I will pretend to work."

boogerbently's picture

Not if you don't "retire" until you can "collect".


FreedomGuy's picture

You go find companies that will let you work and pay benefits till age 70 which is the eventual Social Security retirement age. Unless you are the owner or CEO this will not happen. If you have a physical trade you simply cannot work till that age, nor do you want to waiting for your government handout.

WillyGroper's picture

They start canning people in their 40's.

I know a lady that was 2 count'em 2 days away from a full pension & they poked her right square in the whiskers. She could have poked right back by calling in sick & didn't. Too much integrity. With psychopathic serpents.

FreedomGuy's picture

I feel for you, Willy. If I had to do my life over I would work for myself, never a large corporation.

I am a free market, no government guy. Having said that I firmly believe most CEO's and upper level management are assholes. The founders tend to be the only decent ones and after them come the "professionals" with their degrees from Wharton and Columbia. They do work hard and the simplistic answer to every problem is to work more hours and cut things. They often do not even know or like their business as they were not a part of creating it.

 This is actually the problem when your life is in the hands of others. Government is ten times worse and even less caring than these corporate psychopaths.

new game's picture

do you think the .001 percenters are discussing this situation only from a totally different point of view?

WillyGroper's picture

I left the jack booted corporate gulag in 2012 after a life changing event knowing full well I was too young & would probably never receive a dime that I paid in to the ponzi. I was raised with the skills of a parent that grew up in the depression that should serve me well in survival. I have no doubt at some point I'll scratch out my daily bread from the dirt as my grandmother did & that's OK. It's really the only way I feel/sense that there is a creator amongst the rampant evil taking place. 

The things I witnessed in corporate were unbelievable. Banksters & the tribe will grow a conscience before I submint myself to that kind of indignation & moral degradation again. 

FreedomGuy's picture

I wish you well, Wily. Not all businesses and business people are bad, but they are self centered and I believe that corporate power corrupts similar to government power only at a lower level.

I may yet ditch the whole material thing to be free. However, I bought a new small sports car and I love to race on weekends and do road trips. A part of me, though thinks I could be happy wearing a straw hat and painting old boats on a beach somewhere with just enough to survive on. Simplicity has an elegance and attraction that is undeniable.

boogerbently's picture

NEVER any talk about "running out of money" for Welfare !?!?!

LetThemEatRand's picture

Welfare -- funded by the middle class -- is to prevent revolution.  We are paying for it, they (the .001%) benefit from it.  

Harbanger's picture

Welfare for the FSA and corporate friends of politicos imposed on the middle class, you twitch.  You personally ain't paying for shit, you still benefit.  You're still hoping that this eutopian progressive dream may work out for you.  I'm here to tell you that you are wrong and you will be drawn and quartered.

zhandax's picture

Let's put an end to this charade right now.  None of us are paying for it, not you, not me, not Jamie, not Lloyd, not the chairman of Exxon.  None of us make enough.  The banksters are creating it out of thin air and telling us we owe them, and pols say, "Sure".  A pallet of rope, and the problem is solved.  But that rope has to include every last douchebag in congress as well, cause they won't willingly give up their bribes or the ponzi scheme those bribes support.

Rafferty's picture

That's the whole point....it's NOT being paid for.

new game's picture

it will be paid for in red stuff that flows when life ends...

James-Morrison's picture

The beauty of kicking the can is: You Live to Kick Again.

We all know how that ends...

UselessEater's picture

Spot on Rand. Financial culling by any means as long as its a slow-burn so not enough notice by too many too quickly.... picking at the fringes first so the rest sound like complaining fringe extremists.......

I kinda like Catherine Austin-Fitts descriptor 'slow-burn' explains why its possible to distract the 99% and soak 'us' with the promblem-reaction-solution formula a thousand times over e.g. global warming problem / UN Agenda 21 solution; terrorism problem / capital controls and biometric security controls solution; naughty tax cheats / OECD global tax regime based on FATCA; TBTF / bail-ins to be legislated for a plethora of financial institutions; competition /stress tests that fail banks yet to gobbled up; poor GDP and CAD / TPP and TTIP for transnational corp growth and demise of local companies competing...........

fortunately here in Aust we're heading towards Chinese overlord technocrats so we know our masters, in Zim decades ago it was a confusing toss up for..... about 5 min

(to the ZH'r who doesn't understand sarcasm, my head doesn't fit in a kangaroo pouch its far too big -but a Joey does)


Soul Glow's picture

Be upset that your future tax revenues are keeping the banking system afloat, only costing $85B/month.

Harbanger's picture

You will drawn and quartered Lola.  Go fuck yourself.

LetThemEatRand's picture

Personal failure who preaches personal responsibility says what?

Harbanger's picture

Say what loser?  All I said is you will be drawn and quartered.  That''s the truth.

LetThemEatRand's picture

I thought you admitted before that you are a personal failure?   Like most Randites who blame everyone but themselves for said failure while preaching personal responsibility.

Harbanger's picture

Your thoughts are your personal projections sweetie.  You know what I really think about you.

zaphod's picture

The easiest solution (considering the boomer voting bloc) is to turn all young people into debt serfs. Two generations of government education to love the state will make millenials ready and accepting.

Oh wait, the government has already sucessfully implemented this. There problem solved. 

Harbanger's picture

Their problems have just begun as the idiots they created are easy to sway.  The only thing besides gold that stands the test of time is ____.

new game's picture

lust for all that gold.