American families are generally nuclear and economically self-sufficient. Still, not all households are able to maintain financial independence. Divorce produces individuals and family units needing financial assistance. Older parents sometimes need support from their adult children for medical or housing expenses, and young adults sometimes need financial help from their parents to establish independent households and begin their own families.

Demographic changes also contribute to the dependency ratio. As Baby Boomers (the 76 million persons born between 1946 and 1964) grow older, the elderly portion of the population, persons 65 years and over, will increase from 12.5 percent in 1990 to a projected 18.2 percent in 2020. Looking ahead two decades from now when the first of the Baby Boomers reach age 65 and begin to retire from the labor force in large numbers, the ratio of the retirement-age population (persons 65 years and over) to the working-age population (persons 18 to 64 years old) is projected to increase from its current level of 20 per 100 persons to about 22 per 100 in 2010. By 2030, when the last of the Baby Boomers, those born in the 1960's, reach age 65, this ratio is projected to increase further to 37 per 100. This large increase in the elderly may mean that financially secure households maintained by young workers will need to assume added responsibility for the care of aging parents and other relatives. As a result of the increase in the elderly population, the total dependency ratio (which includes both those under 18 years and those 65 years and over) is projected to rise from 62 per 100 in 1990 to 74 per 100 by 2030.¹

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¹ U.S. Bureau of the Census, Current Population Reports, Series P-25, No. 1018, "Projections of the Population of the United States, by Age, Sex, and Race: 1988 to 2080", table E.