Today, the population age 65 or older in the United States is 23 percent the size of the population ages 20 to 64, but it is projected to be 30 percent as large as the younger group by 2023 and 38 percent as large by 2038. As the baby boom generation ages and life expectancy increases, a greater share of federal spending will go to programs such as Social Security and Medicare. Within those programs, the oldest old will account for more resources. Pressure on the federal tax system to fund that spending will likely increase as the tax burden falls on the relatively smaller working-age group. This session will examine three aspects of the coming demographic change in light of current policy. First, changes in longevity as well as differences in who benefits most from greater longevity have real implications for spending on Social Security. Because higher-income people not only tend to live longer and experience the greatest increases in longevity but also receive higher benefits, we can expect greater spending for those well-off people over their lifetimes going forward. At the same time, policy changes such as increases in the earliest age of eligibility for Social Security or the full retirement age could affect low-income people adversely if they continue to die young before they have collected benefits for many years. Other types of benefit cuts could have differential effects on people of different lifetime income levels as well. The paper by Manchester and Simpson delves into those issues based on a microsimulation model in use at the Congressional Budget Office. Second, the Accountable Care Act will lead to more people having health insurance close to retirement age. Having health insurance prior to Medicare eligibility at age 65 may reduce the average level of health care spending through the Medicare program in the years following first-time eligibility. If that hypothesis is true, overall spending for the Medicare program could be lower than is currently predicted. Data from the National Health Interview Survey will allow Banthin and co-authors to explore how Medicare spending varies at ages 66 and 67 depending on health insurance coverage at age 64. Third, the U.S. tax system includes tax expenditures that reduce revenues coming from wealthier households. We often think of Social Security as a progressive federal program because its benefit structure replaces a lower proportion of high lifetime earnings and a higher proportion of low lifetime earnings. But much of that progressivity could be offset by tax expenditures that support employer sponsored retirement plans. The paper by Smith and Toder will use the Urban Institute’s microsimulation model to explore the effects of the Social Security program together with the tax treatment of employer sponsored retirement plans.