I’m sure tackling these issues is next on Trump’s agenda. Sound of crickets. Fiscal disaster is baked into the cake. Only tough unpopular actions could save the country from this inevitable crisis. Therefore, no politician from either party will propose anything that could work. So it goes. Enjoy the show. Pray. WWQD
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.
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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.
The Social Security Fund consists of IOUs from the Treasury. It’s been bankrupt for years. No way it’ll pay out anywhere near the promised benefits. There’ll be a lot more starving seniors soon.
FWIW, If you’re holding out on claiming social security benefits until that “bigger benefit” age bracket; your being fooled because by taking the earliest benefit you don’t cross over until 83 years old the point where it would have been better to wait for the “bigger benefit”. Inflation is eating up the perceived increased benefit of waiting. More importantly, the premium on your medical component continues to rise until you first apply for benefits. At that point the amount you contribute to medicare gets locked in. Waiting allows your medicare premium to rise, negating any benefit for waiting. Finally, get it while you can. I probably explained this poorly but the bottom line is-waiting is for suckers.
Trying to follow your logic-could you expound a bit using numbers. I know break even on delaying SS comes around age 79( 62 vs 66) at which point recipient comes ahead by waiting (not factoring inflation, solvency, or investing). Medicare comes @ 65, so what do you mean by medicare premiums rising?
I am not a SS expert, but I went through this 3 years ago. I’m saying 65, but younger people may be 67 or 67 1/2.
If you don’t work you can collect your full SS benefit at 65.
If you are 65 and working, you can collect SS – but they will penalize $1 for every $3 you earn – I don’t know the earnings amount where the penalty kicks in.
If you have a higher wage – you must wait until you are 66 to collect your full benefit, without any penalty.
Medicare has a part A – which is hospitalization. It’s a huge benefit – but really a relic from 1960’s – when people were in the hospital for days / weeks.
Medicare – your Medicare part B is voluntary. The premium ‘set’ when you begin SS. So the earlier you join the program the less the premium.
My part B premium is $130 / month + Health Partners Supplemental $120 / month = $250 month. Everything is covered – Dr visits $20. My new hip cost $200.
simple answer, if you wait till after 65 to apply for medicare your cost goes up.
Crat,
There is a “hold harmless” provision where your medicare premium percentage essentially get locked in WHEN you start taking SS. If you wait to claim that “bigger benefit” it doesn’t stop the rise in Medicare premiums. So, in the end you get a “bigger benefit” BUT pay way more for your medicare which negates the bigger benefit you were anticipating. The below article starts to discus this rip-off. For the best info go to DanielAmerman.com and look through his stuff. That’s where I read the article originally. Amerman has a bunch of mind blowing stuff the govt pulls off on us. I hope this helps and sorry to disappoint.
http://www.investmentnews.com/article/20160926/BLOG05/160929936/social-security-timing-can-affect-medicare-premiums
Crat,
This spells out considerations when to apply for SS. Be sure to read the whole article. You’ll be pissed but finding out now is better than later. Bottom line-get it while you can.
http://danielamerman.com/va/BenefitAge.html
Thanks for the info. Should have known the gov . would find a way to screw things up.
Just read your link. Great info!
If there’s less money to dole out, they’ll just dole out less money. I’m convinced that we’ll go to “Medicare for All”. It’s probably suboptimal compared to a private insurance/medical system devoid of graft, but since the insurers and medical industry haven’t allowed the graft to be excised, they’ll all be put out of business. Sobeit. Fuck em. Just try to stay healthy.
Medicare for all was once a real, if not savory, prospect but with the insurance lobby taken care of by Obama care ended that potential outcome. Big Pharma and big insurance one the favorite vultures of the democrats are now fed at the public trough.
Print, print, print. That’s all they know how to do. John
When the Fed is buying government bonds, it means the government is already bankrupt…That is not a problem for politicians. If necessary they will seize your bank accounts, retirement accounts, and whatever else allows them to continue on their merry way.
You mean a liquidation, similar to what happened throughout Germany and Europe during WWII
I think about the old mimeograph machines!
Your ‘WWQD’ seems a little snarl-caustic. Haven’t you read about the 100,000 sealed indictments? These guys will not get away, If they try to impeach Trump, he can always pardon himself and get on with the indictments and cash appropriations that can fund SS for 100 years. Why do I have to explain something even a moran can clearly see?
EC
Ha Ha Ha Ha, That was a good one EC
“And he causeth all, both small and great, rich and poor, free and enslaved, to receive a mark in their right hand or in their foreheads, and that no man might buy or sell, except he that had the mark, or the name of the beast, or the number of his name. Here is wisdom. Revelation 13: 16-18
Had someone comment on time, ” I don’t see what’s the problem. All they gotta do is print more money.”
And therein lies the problem—these ignorant MF’s are allowed to vote.
By the time these dire events occur it’s probably safe to say that the U.S.A. will be broke and the welfare checks won’t buy anything for the free shit army. Someone needs to write an article talking about the Planet of our Real Apes when this occurs. Anyone living in one of those big Democrat shit hole cities populated by the plethora of our Real Apes had better be getting the hell out of there and sooner is much preferable rather than later!
Why do the dates of purported insolvency keep moving forward??
Raise the minimum wage to $20/hr, double or triple the SocSec tax. Problem solved! Right, Mr. Burnanke?
https://youtu.be/EKja6BB6Z6s
2021 will be the year the banksters pull the plug on LIBOR and give themselves the ability to alter established debt contracts…
Another great interview by SGT REPORT from last month.
Prayer would be a very good idea actually.
Remainder of USA government insolvent in 2008.