Social Security's 85-Year-Old Problem

Social Security faces several problems. It is underfunded and could run out of money by the middle of the next decade. Another is that inflation has started to eat into the fund, which gave a cost of living increase for 2023 of 8.7%. A large problem still is the number of people over 85 as time passes. According to the Social Security Administration, it will make payments to 17 million people who are 85 in 2050.

The trouble with paying those very old people is twofold. First, if Social Security is out of money, how will it pay them? Presumably, Congress will ensure Social Security is funded beyond the 2030s, even if the payouts are cut from current levels.

As the population ages, the number of years Social Security has to pay, on average, gets longer and longer. Someone who took benefits at 62 and lives to 85 will be paid for 23 years. As time passes, and the total of 85-year-olds increases, this extended problem raises questions about how Social Security operates in the second half of the 21st century. Even if Congress cuts benefits, the aging population’s challenge does not disappear.

Who will support the 85-year-old if Social Security cannot, at least at a level where they can afford the most basic food and housing? Corporations gave up on pensions years ago. A collapsed stock market can undermine IRA payouts. People who are 60 today may not see a market recovery by the time they retire.

One future for very old Americans is that many will be poor. It is not out of the question. Societies have given up on the very old in the past, and public support for retired people is relatively new by historical standards.

There is a temptation to believe that there is a solution to all major problems, particularly when they involve millions of people. That may not be true in the case of financial support for very old Americans.

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