Social Security Bulletin, Vol. 61, No. 1
In this article, the financial prospects of baby boomers in their elderly years are examined. The article primarily attempts to draw together and summarize results found by other researchers, but a few new estimates are presented. The consensus of the research appears to be the following. Up to this pint, the baby boom generation as a whole has a higher economic status that did their parents' generation at the same ages, but this does not hold for some subgroups. When it becomes elderly, the baby boom generation as a whole probably will have a higher economic status that their parents' generation has and will have at those ages, but, again, this may not hold for some subgroups. It is uncertain whether the baby boom generation as a whole will have enough resources in retirement to maintain their preretirement standard of living without increasing their saving or retiring later, but some subgroups will be able to maintain their living standard without changing their behavior.
In 1995, about 1,017,100 persons receiving payments from the Supplemental Security Income program had their cases closed and their payments stopped. This figure represents 16 percent of all recipients paid during 1995. The most frequently cited reason for these case closures were excess income and death. Of those cases closed for reasons other than death, 41 percent eventually returned to payment status within 1 year. Based on work done with earlier cohorts, that figure can be expected to rise to nearly 50 percent after 4 years have elapsed.
The number of case closures in a given year is affected primarily by the size of the caseload and the number of reviews that these cases undergo. Despite some fluctuations in the numbers of these reviews over the last 8 years, the overall number of closures as a percent of caseload has remained fairly steady—in the 16- to 18-percent range.
Among older women, widows are more likely to live in poverty than married women. Thus, increasing Social Security benefits to widows seems desirable. Shifting some Social Security benefits from the period when women live as part of a couple to the period when they are widows could reduce poverty. This article uses the 1991 Survey of Income and Program Participation exactly matched to the Social Security Administration's record of benefits to evaluate the effect on poverty rates of four cost-neutral proposals that transfer Social Security benefits from married couples to surviving widows. The policies would moderately decrease poverty rates among older women by reducing the rate for widows more than the slight increase in the rate for couples. The evaluated proposals include a proposal supported by the majority of the 1994-96 Advisory Council on Social Security that would calculate the survivor's benefit as 75 percent of the couple's benefit, reduce the spouse's benefit from 50 to 33 percent of the husband's benefit, and reduce benefits by 1.5 percent.