Americans in their fifties face social insecurity

Benefits for Americans in their fifties are projected to run out by the time they reach retirement age, according to the Social Security and Medicare Trustees’ annual report. Social Security will be insolvent by 2035 with an $800 billion shortfall between payments and revenue. This implies a 17 per cent cut in benefits to make up the difference despite nearly half of Americans aged 55 to 65 having no personal retirement savings. Medicare is in similar trouble. The fund covering hospital stays for the elderly is set to run out by 2036, leading to an 11 per cent cut in spending. For context, average 2020 healthcare costs were $22,356 annually per person for over-65s on top of their Medicare benefits. It gets worse. An alternative model with true-to-trend provider costs implies an even greater shortfall. Under current conditions, many Americans will have to work well beyond 65 to make ends meet.