The financial health of two of the biggest government programs has worsened due to the affects of this recessionary market. The Social Security Administration announced today that Medicare is now paying out more in benefits than it is receiving, and that by 2016 Social Security will be paying out more in benefits than it receives.
Insolvency for Social Security has been revised to 2037, four years sooner than was predicted last year. Medicare is in worse shape with predictions of insolvency by 2017. With unemployment reaching 25 year highs at 8.9%, America has fewer workers paying into Social Security exacerbating the problem.
Timothy Geithner, Treasury Secretary and head of the trustees group said, “the longer we wait to address the long-term solvency of Medicare and Social Security, the sooner those challenges will be upon us and the harder the options will be.”
That is a pretty obvious statement. It is also obvious that we shouldn’t depend on the government for our retirement plans. Let this be a reminder that retirement planning is our responsibility.