Methods: This analysis uses the state of New Jersey for the case analysis. In this study we utilize the Survey of Income and Program Participation (SIPP), a national dataset, to estimate the projected costs of five major program expenditures from 2018 to 2030 based on the number of new retirees age 65 and older. We developed an estimation model for projecting costs of the major programs funded by federal and state governments and utilized by current and future retirees. Subsequently we estimated the costs for each program in the State of New Jersey for the period 2018-2030. The major programs include Supplemental Security Income (SSI), Medicaid, Low Income Home Energy Assistance Program, Property Tax Reimbursement Program or Supplemental Nutrition Assistance Program (SNAP).
Results: Between 2018 and 2030 we estimated 101,000 to 137,000 individuals will turn 65 years of age in New Jersey each year. This cumulative effect yields a significant growth in the number of older adults in the state. Between 2018 and 2023 the cumulated estimate of the number of adults who turn 65 will total 870,000. When we extend our estimates to 2030, the cumulated total nearly doubles to 1.6 million. Our cost estimates consider program eligibility criteria and death rates, as detailed by the Centers for Disease Control and Prevention (CDC). Based on current estimates of financial assets, resources, and net worth, there are wide disparities in asset and income distributions among New Jersey retirees. Due to the costs of housing and medical expenditures, in particular, we project an increase in asset and income inequality among the older adult population For new retirees who qualify for any one of the five programs assessed in this study, the growth in the program costs between 2018 and 2030 is significant. The program with the most significant increase in cost to the state of New Jersey is Medicaid.
Conclusions and Implications: This study assessed the proposed increases in direct benefit expenditures for select means-tested programs over the next 12 years. The increased reliance on government programs among retirees adds significant burden to governmental expenditures. To reduce the projected governmental expenditures for five public assistance programs, a number of measures are recommended. Two of these measures include: improved savings rates for near-retirees and cost containment strategies in Medicaid.