Only now are Americans beginning to explore the ways in which the "graying of America" is creating new demands on the country's economic resources and forcing new choices in its politics as well as in its citizens' personal lives. Here Joseph Califano, former secretary of health, education and welfare, takes a broad look at some of the new social possibilities and policy dilemmas, while Eric Kingson of the University of Maryland examines up close one particular approach to the long-term financial strains on Social Security.

We stand at the dawn of a four-generation society. Increasingly, we will see great-grandparents playing with their great-grandchildren, two generations of the same family receiving retirement benefits and Social Security.

We applaud the advances of medical science that have produced a 10-year increase in life expectancy in just over a generation. But we have finessed for too long the economic, social and human responsibilities that accompany that achievement. If we don't step up to the graying of America, our dream of the golden sunset years could become a terrifying nightmare of poverty and insecurity for millions of our citizens.

True, Congress appears to be working out the current Social Security crisis. But Social Security is just the tip of the iceberg.

Medicare, which pays most of the health bill for those over 65, will run out of money in five short years. Veterans Hospitals can no longer keep the congressional promise of providing health care to the over-65 veteran of World War II. Medicaid--the federal-state health care program for poor people--now pays more than 41 cents of every dollar it spends to nursing homes for the elderly. That's enough to drive state budgets into chronic deficit, but it's not nearly sufficient to provide scores of thousands of senior citizens with the nursing home care they need.

The stakes for the federal budget make the current fracas over defense spending look like a penny-ante poker game. By 2025, when the senior boom hits, far more than half--perhaps 65 percent--of the federal budget will go to those over 65. By then, the ratio of Americans aged 20-to-64 to those over 65, nine to one in 1940, will be three to one.

When President Franklin Roosevelt proposed a Social Security system providing income for Americans over 65, the life expectancy for males was less than 60, for females less than 64. Today, life expectancy is over 72 for a man, almost 80 for a woman. And the millions more men who make it to 65 have an expectancy of another 15 years, the women, another 20 years.

These demographic facts tell why President Reagan is the third consecutive president to face a squeeze in the Social Security program. But the bipartisan program winding its way through the House and Senate will not solve the long-range Social Security problem. And, as yet, there's no political stomach on the Hill to deal with the other public programs in trouble because America is getting older.

The financial issues for our retirement systems, public and private, may be even more serious than those confronting social programs. There are more than 40 different retirement plans in the federal government, more than 6,600 state and local pension plans, and thousands of private ones. Together, these pension plans will soon be paying $100 billion in benefits each year to some 55 million people. They vary widely in contributions, benefits and financing. They are subject to a maze of sometimes inconsistent legal, regulatory and tax treatment.

So many of these plans are underfunded, or not funded at all, that young workers cannot rely on them unless some drastic changes occur. Going into the 1980s, federal pension plans had unfunded liabilities of between $500 billion and $650 billion. State and local pension plans entered this decade with estimated unfunded liabilities of between $250 billion and $350 billion. The estimate for private plans has been conservatively set between $300 billion and $400 billion. Together, these unfunded liabilities topped $1 trillion last year, and they continue to rise at ever-increasing rates.

Many of the largest industrial corporations in America have unfunded pension liabilities equal to a third or more of their net worth. Several have such liabilities far in excess of the aggregate market value of their common stock.

The relationship among the patchwork pension systems, public and private, must be reexamined and restructured if we are to fulfill the obligation that social justice imposes on a society to take care of its elderly, and particularly those in most need.

Not just the pensions of federal workers, but all public and private pensions must be rationally integrated with Social Security. Income maintenance policy for the elderly should not be a game with complex rules--winners who get windfalls, and losers who get nothing. It should be a rational system meeting definable human needs.

We should rethink conventional concepts of old age and retirement. At present, we operate with two distinct concepts of retirement. The more traditional concept is as support for workers who have reached old age and can no longer work. The second views retirement as a reward, not necessarily related to old age, but rather for a certain period of work, typically 20 to 30 years.

In the military and most police forces, for example, a pension is available after only 20 years of service, regardless of age. Workers in the federal civil service (and in many state and local governments) with 30 years of service can retire on full pensions at age 55. This year the federal government will pay more than $20 billion in retirement benefits to persons under 65. Clearly, this concept of retirement is expensive. It was born of choices that affluence without inflation offered in past years.

It's time to re-examine the existing incentives for early retirement. We should explore new kinds of work arrangements that might accommodate greater numbers of older Americans in the work force, such as phased retirement and increased part-time work. Older workers can contribute to economic growth, improve their purchasing power, and help create a need for more jobs for younger workers, rather than replace them.

These concerns about financing retirement are critical, but they are only part of the challenge that the four-generation society poses. Our health care, housing, transportation and social service systems are under enormous tension and need imaginative restructuring to accommodate our aging population. Solutions will not come easily--or cheaply. The long-term care problems of the elderly, short of hospitalization, demand such enormous sums of money that not even the cradle-to-grave Kennedy national health plans dared attempt to provide such coverage.

Coming to terms with the first four-generation society in history requires more than rhetoric calculated to get the votes or calm the tempers of the elderly. It calls for more political courage than any other domestic issue our nation faces.