Retirement planning involves looking ahead and making projections based on the information that is available you in the present. Of course this is an ongoing process and as new information becomes available adjustments are inevitably going to be necessary. There are a lot of things that are out of our control, and the financial meltdown that took place in 2008 certainly demonstrated to all of us that changes can come down the pike in a hurry. But it would seem on the surface as though one thing you can certainly count on when your retirement years roll around is the fact that Social Security and Medicare will be there for you.
Your full retirement age varies depending upon when you were born but if you’re not currently receiving Social Security it will be somewhere between the ages of 66 and 67 as the laws currently stand. However, if you’re paying attention to the mood in Washington with regard to the federal budget deficit you have to wonder about the future of Social Security, Medicare, and Medicaid.
Social Security and Medicare alone accounted for 34% of federal spending in the United States in 2010, and when you add in Medicaid and the CHIP program that provides health insurance for children that chunk rises to 41%. Traditionally any talk of reduction in benefits for retirees has been seen as politically untenable, but these programs do seem to be under a lot of scrutiny at this juncture.
The amazing fact is that there are 10,000 new applicants for Social Security each day and this is going to be taking place for the next 20 years. If the people on Capitol Hill think that these costs are unsustainable now, what will the situation look like going forward with so many people joining the rolls as the baby boomers reach retirement age?
Balancing the budget seems like a sound idea in principle, but the truth is that this objective clashes with reality. If you’re planning for your retirement it would probably be a good idea to pay close attention to discussions regarding the federal budget that are taking place in Washington.
- The Magic of Grantor Trusts - November 1, 2023
- IRS Confirms Grantor Trust Status Alone Does Not Cause a Step-Up in Basis - October 26, 2023
- Understanding the Importance of the Simultaneous Death Act - October 19, 2023
