The unprecedented demographic shift in which people over age 65 make up an increasingly large percentage of the population is not a temporary phenomenon associated with the aging of the baby boom generation, but a pervasive trend that is here to stay, according to a new report by the National Research Council. That’s because people are living longer, and many couples are choosing to have fewer children and have them later in life.
According to the report, the ultimate national response to this major demographic shift will likely be some combination of major structural changes to public support programs, more savings during people's working years, and longer working lives. The NRC committee found substantial potential for increased labor force participation at older ages, which would boost national output, slow the draw-down on retirement savings, and allow workers to save longer.
In addition, the report suggests that workers can better prepare for retirement by planning ahead and adapting their saving and spending habits.