The annual report on the health of Social Security and Medicare was released today and the news was so-so, especially for younger people who are concerned about retirement planning.
- Medicare, which serves 46 million retirees and people with disabilities, will continue to be able to pay the bills -- thanks to health care reform -- until 2029.
- Social Security, on which 53 million seniors and disabled people rely, will spend more on benefits than it receives in payroll taxes this year and in 2011. Starting in 2015, it is likely to run a deficit every year, but there will still be money to pay promised benefits in full through 2037. Beginning that year, payroll taxes and other income would only support about 75 percent of benefits.
The report was prepared by the Office of the Actuary, which is part of the Department of Health and Human Services, although the findings were announced by Treasury Secretary Timothy Geithner and Health Secretary Kathleen Sebelius.
Now's the time to do something about the long-term viability of these two programs. Their demise would be a disaster, affecting not only those people who have no other options, but also making life more difficult for people who have been wise in their retirement planning. Aside from the humanitarian aspects of the failure of this safety net, the drag on the economy would be horrendous.
What happens next will be decided in part by the 18-member bipartisan committee set up by President Barack Obama to fix the deficit after the November elections. AARP is already lobbying against raising the retirement age or cutting benefits.
To me, raising the retirement age doesn't seem like such an untenable burden. I think about my grandmother who died 30 years ago after being a farmer's wife for 40 years. At 65, she had lost all her teeth and her arthritis kept her from moving freely. She ultimately died from skin cancer that she ignored, probably for years, in part because there were no doctors near where she lived in rural West Virginia.
Today, we address those problems and we're getting better at doing it. At 65 or 66, most people are still healthy and able. Asking them work a little longer isn't unreasonable.
Sixty-five is the new 50.