Social Security and Medicare costs are rapidly rising due to the retirement of 74 million baby boomers into a system that already runs substantial per-person deficits. Today’s typical retiring couple has paid $140,000 into Medicare and will receive $420,000 in benefits (both adjusted into net present values). Most Social Security recipients also come out ahead. Back in the 1960s, 5 workers supported the benefits of each retiree, yet within 15 years each retiree will be supported by only 2 workers.
CBO’s Long-Term Budget Outlook shows that between 2017 and 2047, Social Security and Medicare will run a cash deficit of $82 trillion. Specifically, Medicare will run a $40 trillion cash deficit, Social Security will run a $19 trillion cash deficit, and the interest costs of those deficits will add $23 trillion more. The rest of the budget had been projected to run a $4 trillion surplus over this period, although making the latest tax cuts permanent would likely change this to a roughly $5 trillion deficit.
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