It seems like a long time off and a lot of people. The U.S. Census Bureau expects the country to have 98 million residents ages 65 and older by 2060. The problem is that in 2015 14.5% of Americans were aged 65 and older. In 2060, the percentage will be 23.5%. The burden on Social Security, public health services and the job markets will go from difficult to unmanageable.
The Social Security solvency risk is tremendous. According to the Treasury:
Social Security is officially solvent so long as the trust fund balance is positive. Based on economic and demographic assumptions from the Social Security Board of Trustees, the Social Security Administration projects that the OASDI trust fund (the combined OASI and DI trust funds) will have insufficient funds to pay currently scheduled benefits beginning in 2041. The projected trust fund exhaustion date can change from year to year as new data and assumptions are introduced into the Social Security Administration’s calculations. For example, the 2000 Trustees Report projected a trust fund exhaustion date of 2037; since then, the date has been pushed back four years, to 2041. That said, if the current projections prove accurate and if no program changes are made, then current law mandates that benefits actually paid be scaled back to a level that is consistent with then-current payroll tax income when the trust fund is depleted. In other words, if no action is taken, current projections imply that all beneficiaries will have their benefits reduced in 2041 by 25 percent compared to what is promised. The share of scheduled benefits that would be payable would then slowly decline from 75 percent in 2041 to 70 percent in 2081.
The Treasury’s is only one among many forecasts, which vary wildly. Suffice it to say, people 65 and older in 2060 may face an organization with funds that cannot pay them.
The health care burden is just as heavy. Alzheimer’s alone will be a terrible problem, with an estimate of 13.8 million Americans suffering in 2050, compared to 5.1 million last year, unless there is a significant medical breakthrough, according to the Alzheimer’s Association. Heart health and cancer problems among the aged also will increase as the population does. Medicare and private health care providers will suffer.
Additionally, so few Americans have enough retirement funds to leave the workforce that older workers will linger. If the labor pool does not grow rapidly, these older Americans will take jobs that might go to younger people, putting pressure on employment levels for those just entering the workforce.
2060 seems a long way off — that is, until the date gets much closer.