This report was originally published by Tyler Durden at Zero Hedge
Medicare’s trust fund has just eight more years of solvency until 2026, and Social Security will be exhausted in 2034, according to Thursday projections by the trustees for the government programs.
While Social Security’s expected depletion is unchanged from last year’s projection, the date for Medicare’s demise was moved up three years.
Social Security is made up of several funds; the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) are combined for the designation OASDI, while Medicare’s Hospital Insurance trust fund is designated HI.
If allowed to expire, beneficiaries would face an immediate reduction of around 20% in benefits.
The costs of Medicare and Social Security will increase substantially as a percentage of GDP through 2035 due to a sharp rise in beneficiaries as baby-boomers retire, and lower birth rates that have persisted since the baby boom resulting in slower growth of the labor force and GDP.
Social Security’s annual cost as a percentage of GDP is projected to increase from 4.9 percent in 2018 to about 6.1 percent by 2038, then decline to 5.9 percent by 2052 before generally rising to 6.1 percent of GDP by 2092. Under the intermediate assumptions, Medicare cost rises from 3.7 percent of GDP in 2018 to 5.6 percent of GDP by 2035 due mainly to the growth in the number of beneficiaries, and then increases further to 6.2 percent by 2092. The growth in health care cost per beneficiary becomes the larger factor later in the valuation period, particularly in Part D.
Over 62 million retirees, disabled workers, spouses and surviving children are tapping into Social Security benefits with an average monthly benefit of $1,294 for all beneficiaries. Medicare, meanwhile, provides health insurance to around 60 million people – most of whom are over the age of 65.
The revised dates for Medicare’s demise raises the chances of a major fiscal battle facing Congress.
The individual tax cuts implemented as part of the GOP tax overhaul are also set to expire at the end of 2025, meaning that lawmakers could have to navigate major changes in federal taxing and spending in short order, just as they did with the 2012 “fiscal cliff.”
Over a long time frame of 75 years, the hypothetical combined Social Security trust fund faces a shortfall of around $13.2 trillion, up from $12.5 trillion last year. –Washington Examiner
Closing the gap would require an immediate hike in the payroll tax of 2.78% to 15.18% or an immediate reduction in current benefits of 17%, according to the Trustees.
If there’s a silver lining in the report, it’s that fewer people are applying for and receiving disability insurance through Social Security while the economy improves. Perhaps this will help the disability insurance fund last past its projected demise in 2032.
Obammy the closet republican wanted to cut social security 20% when he was the then propped up figurehead. Snookered all of his dumb ass voters. The color don’t matter.
Can’t believe SS could be broke with all them Undocumented Immigrants paying in and none of them getting to draw anything out.
The 50% increase in disability under obammy is a big part of the fraud and corruption bankrupting these programs.
If they cut or cancel SSI or Medicare for the 65 yr olds I fear those people will hang politicians in the street until every living elected politico has paid with their lives for the ponzi scheme they perpetrated.
Oh well, it looks like I might be living in the truck for awhile before I 23 skidoo off the old rockpile.
Precious Metals = Brass and Lead.
Hey, if you are old, not working and not paying INCOME TAX then die!!!!!!!!! All good dictatorships got rid of their “useless” lives. Why should we be any different.
If you pay for your own health care, fine. It’s your money. BUT if “society”is to pay for it, and you are not paying INCOME TAX, since you are lazy or retired, then…………..DIE !!!!!!!!!!!
Centurion,
Wow! Dictatorships are nice as long as you get to be the dictator. So, who died and left you in charge to determine who is useless or not? FOAD yourself comes to mind. Supposedly, one of the hallmarks of an advanced culture is that it does care for its young, infirm and elderly unlike under totalitarianism.
I was never a big fan of Social Security. It was enacted before I was born and I had no choice but to contribute to it and Medicare for well over fifty years. My employers also had to contribute an equal amount for my benefit. The point is that it’s my money. It’s not yours, or the government’s or society’s, it’s mine and I want it back as promised. These programs were originally sold to the public as government knows best how to protect the people from their own folly. If there had been a choice, I would have been better off saving and investing that same amount myself over the years. As it is, I’d be happy to cash out my and my employers’ contributions now with compound interest and adjusted for inflation and fend for myself. Then I wouldn’t have to hear crap from entitled ingrates.
I’m as mad as hell about the situation as you are. The politicians of both parties have misused this fund and not operated it in an actuarial sound manner. They have run up a national debt for political purposes that can never be repaid. They have driven up the costs of medical care astronomically because of their interference in the free market system. That’s who you should be angry at, not me or your grandma and grandpa because they worked all their lives and had the great misfortune to get old. It’s going to happen to you someday too. By the way, I earned two other sources of retirement income so that I wouldn’t be a burden to my family or society. I pay income tax on all of it including Social Security benefits. I also pay state income tax, property tax, sales tax, tax on my vehicles just like everyone else so take your little centurion and his tiny little centurion helmet and march off in some other direction.
Old does not equal useless. Granny and Gramps pass on much useful knowledge to the younger generations. If yours are gone, than find a retiree with wisdom to share.
Retirees also contribute very often to charities or offer their services. Who makes those little blankets that Project Linus hands out to suffering children (often hospitalized)? Who makes little beds for pet shelters? Who makes quilts to comfort our injured warriors? Who runs the bookmobiles or checks out your media at the library? Who helps with various fundraisers? Who volunteers at the local recreation centers or parks?
Yes, it’s all those old people you condemn. Regular working folks don’t have time to do these things and cities cannot pay for it all.
Oh, and tax is a huge thing when retired. You still have to file pay income tax if your income is above something like $23,000 so that includes SS at times. Taxes also include things you buy such as gasoline, property tax, and all the other innumerable taxes levied upon us all. No one skips free because of advanced age.
As for health care, Medicare is not totally free. Each individual pays a monthly amount (based on income). Want help with prescriptions? That’s another fee. Oh, and if you use Medicare, it only covers a portion of the bill; the rest is up to the individual. Want dental or eye care? Sorry, Medicare has no coverage; everyone is on their own for that.
Sorry you think older people are useless. They are walking libraries and can tell historical stories that books never touch.
CENTURION, Spewing hate. Hating Seniors. Wow. You are one messed up dude.
You should be BANNED from shtf. You’ll only get crazier.
Another choice is let in about 50 Million Mexicans, Aztecs, Incas and Mayans and tax them to pay for the old white people.
Centurion, but first they have to actually work before they’re taxed.
There’s your problem!
Centurian: Yaaay! totally agree. Anyone coming into this country must work or leave elsewhere.
Medicare Will Be Insolvent In 2026
Ok the bloody Gubeerment has been for the last 40 years. So what is new????
Sgt.
Exactly.
There is no “problem”. Just print up the money like they do at present.
Oh, and there is no “Trust Fund” either. The money goes into the General Fund and is paid our of current tax receipts. That’s why it is a Ponzi scheme.
the govt will kick that can down the road easily. so many other govts are more in debt than the usa and still roll along, but that day when cuts are coming will come and if you are under 40 and maybe even 50 or 60; you will live to see it.
and when that happens, death panels will be mandatory and the govt will be grabbing every asset it can find to keep things floating.
you guys hoarding metals and stockpiling ammo thinking you’re going to hold off a govt that needs your assets are kidding yourselves. if you have serious assets that should outlive you, i’d advise enjoying it now while it’s still yours. once the democrats run the country because of decades of unchecked immigration, they’ll just vote you out of your own savings.
Lena: Gotcha, makes sense too. Banks paying nil, we buy mini tax free’s as retirees. No other way to get income as stocks can reduce dividends from when they are bought. But many of us stockpile ammo, etc. in case of an EMP. Another is bio weapons or a pandemic. Medicare folks will be first to be “death paneled” along w/ handicapped and welfare/medicaid. Serious asset folks: Now go buy ya some nice jogger/road shoes like Brooks Glycerin or Hoka Bondi 5’s. Buy a car with cash, get an RV, or whatever. Finally, folks over 50 need to do prepaid/ pre need (final expenses) so as not to burden your heirs.
I have to chuckle every time I hear this.
Does anyone really believe that the .gov, and/or whoever in in power at that time will crash 60 million recipients.
That would be total political suicide, and TEOTWAWKI for millions of .gov supporters.
This is just another scare tactic used to keep people in-line and bowing down to their Bull Shit.
Seems the .gov has NO problem with ‘taking’ the money out of SS, and spending 1.2 $trillion more in debt each 6 months AND voting themselves raises, but they find it so easy to scare people into thinking their SS and Medicare is going to go poof.
Simple fix, take away all the special “stuff” for Congress and 99% of all ,gov employees and see what happens.
Ohhh one more thing, if anyone is incompetent enough to ONLY depend on SS for retirement…. Opps.
Again I call Bull Shit.
NRP,
I agree with you about screwing over 60 million voters not going to happen. Those little old ladies voting for Democrats will change parties in about 1/2 second, presuming our vote actually counts for something.
I also agree.
They should never have dumped SS into the General Fund but that boat sailed a while back. SS was set up to be a sacred trust for the elderly and that broke it.
I sure hope I get back what I pay into it.
Wikipedia has some interesting info on SS. https://en.wikipedia.org/wiki/Federal_Insurance_Contributions_Act_tax
I wouldn’t care if medi went broke tomorrow, I rejected part B. they wouldn’t let me opt out of part A because its supposed to be free? What is occurring is the greatest generation of producers, spenders and taxable citizens for the govt to robb (Baby Boomers) are now retiring and dying at record rates. The following generations are spenders but not with money they earned but with borrowed money or funding from parasite entites like our bankrupt government. So how could the Social Security Ponzi scheme be solvent when it spends more than it takes in. And the USA is trillions in debt that every one should know cannot even be reduced let along be repaid?
OG,
Vast majority of that debt is owed to Americans. Social security being the biggest @ 2.8 trillion.
Medicare has about 994 billion.
These are 2016 numbers.
By law Treasury debt gets paid first, before all else.
If the US gov’t stiffs anybody it will be Americans.
Mostly retirees. They vote and they have guns. Things will
change if we get stiffed by some Liberal Democrats that prize
perversion, lawbreakers, and racial division above all else.
Was the 2026 prediction based in part on the continued funding of Obamacare? Obama stole large amounts of money to fund Obamacare. Theoretically, the money taken from Social Security and Medicare are owed by the Treasury to those funds and must be repaid. Perhaps, they are saying that the Government’s credit is no good and will never be repaid?
They’ll change the rules as to who gets Social Security to work in the question of need. People who make in excess of a certain amount of income don’t get Social Security payments. That was the precedent. The amount of the payment will be reduced by the amount of your income and perhaps on the basis of your estimated wealth. This will apply to all recipients. Most younger taxpayers are already resentful of older people and have written Social Security off for themselves. When the “crisis” hits, it will be easier than you think to change the system.
I expect at least to get back what I put in. We’ll see…..
In another year or so, I will have gotten all that I paid in. Every check I get after that will be from current workers.
It’s a Ponzi scheme. Everyone who lives more than 4 or 5 years after retirement gets back more than they paid in.
How long did they expect that scheme to last?
In every real system where people take in money from other people in trust for the future, you get paid interest.
If you run the numbers with even modest old school (60s thru 90s) whole life insurance policy interest rates (you know like 3%)you will be collecting your own money well into your 80s (may you live so long)
Only in the Bizarro world of the Goobers do they take your money for 40 years and tell you should think about it in terms of the money you put in coming back to you dollar for dollar…Oh and BTW those dollars I put in back in the 60s and 70s are worth about 10 of today’s FRNs much less talk about interest…
<bb
Tyler Durden. Thats not your real name. Things will go belly up long before 2026 and 2034.
What a wet blanket of an article along with these yokles in the comment section.
Good, let it break. I’m still youngish, so stop taking my money with these B.S. taxes. I’ve known for a while that I’ll never get back what they stole. Let the entire welfare state break, and stop stealing from the citizens, especially while giving illegals free health insurance.
Ever since the government stole out of the social security fund combined and combine that with inflation, duh its insolvent. They steal about 2k a year from me which I’d rather use to purchase 10 pounds of silver and provide my own retirement.
ss has been in the red since 1964 when President Johnson and the fine Democrat party voted to put the SS in the general fund. So all the bomb craters in Vietnam and the great society were paid for by SS and continues until today.
It’s not the baby boomers who caused this. Stop blaming them. For decades now, it’s the greedy bankers. It’s the greedy politicians who are at fault.
The problem started long before the baby boomers were even born in the late 1940’s to 1960. The baby boomers did not, and still don’t, have all of this power some of you seem to think they have.
The baby boomers just paid into it all throughout their working years, from their very first part-time job in the 1960’s to whenever they retired within the past few years or past decade. While they were paying into the system, their about-to-be-retired parents, and those already retired, were reaping the rewards. That’s how it works.
Now it’s the baby boomers turn to collect what they paid into for many decades. That’s how it works. It’s called ‘Transfer of Funds’–Economics 101.
As a GenXer with kids, our kids will pay for our benefits, and so on. That’s how it’s supposed to work. If the whole thing crashes, blame greedy politicians and bankers. Not an entire generation of people from the 1950’s who were powerless and who were also scammed and victimized by powerful, greedy people in power.
Blame the politicians and bankers. The baby boomers are just as much victim to these greedy bastards as anyone else from every other generation. They had no way of robbing or stealing your SS benefits. There were regular deductions taken from every single one of their paychecks, from their very first paycheck to their very last last one. For many that spans 40 years.
Let go of the lies you were fed and bought into and stop blaming an entire generation of people for something they had no control over. Look to the real culprits instead, the thugs in power. Every generation has it’s share of thugs in power and they are to blame. Blame the culprits, not the millions of victims.
Well said. And thank you.
I’d also like to point out that the “Greatest Generation” (named by themselves) were at the helm when some of the really crummy decisions were made by the politicians of that generation. Stagflation of the 80s? Not Boomers…at least half were only beginning their careers. There’s more that could be said, but it’s late and I’m tired.
In 15 or so years it will be the Millennials that will have to choose what or if cuts to SS are to be made.
Once the guilty crooked bureaucrats in the US gov’t are arrested and put on trial in front of the American people Nuremberg style………, only then can change be possible. Until then;, conditions will continue to deteriorate. Where do you think all this money is going? It is being plundered out of the Treasury by nefarious entities. There is PLENTY of money to cover social security and Medicare.