Financing Old Age Dependency

Posted: 8 Aug 2014

See all articles by Shinichi Nishiyama

Shinichi Nishiyama

Congressional Budget Office

Kent A. Smetters

National Bureau of Economic Research (NBER); University of Pennsylvania - Business & Public Policy Department

Date Written: August 2014


Baby boomers are now retiring in large numbers, and most do not have enough assets of their own to finance retirement. Social insurance programs help baby boomers afford retirement, but these programs are substantially underfunded. Reforming these institutions earlier will produce fewer distortions than continued delays. Several options also exist for helping households prepare for their own retirement: improving financial literacy, more opt-out defaults, better guidance about the value of delaying retirement, better guidance about delaying the claiming of social security benefits, improved estimation of out-of-pocket medical costs, and understanding the incentives facing their financial advisors. Some of these options are likely to be more effective than others.

Suggested Citation

Nishiyama, Shinichi and Smetters, Kent and Smetters, Kent, Financing Old Age Dependency (August 2014). Annual Review of Economics, Vol. 6, pp. 53-76, 2014, Available at SSRN: or

Shinichi Nishiyama (Contact Author)

Congressional Budget Office ( email )

Ford House Office Building
2nd & D Streets, SW
Washington, DC 20515-6925
United States

Kent Smetters

University of Pennsylvania - Business & Public Policy Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6372
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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