The difficulties of the U.S. retirement benefit system are getting worse

The difficulties of the U.S. retirement benefit system are getting worse (Alberta Times) Government officials who oversee the provision of pensions and medical care to the elderly say that relevant programs are in financial difficulties...

(Alberta Times)

Government officials who oversee the provision of pensions and medical care to the elderly say that relevant programs are in financial difficulty, and the situation has become worse last year. Millions of elderly or disabled Americans rely on a pension system called Social Security to make ends meet. Millions of people still rely on health insurance available to people over 65: Medicare. Monday's report said the retirement benefit program will deplete reserves by 2033, three years earlier than previously estimated. That means the system will rely entirely on a specific portion of payroll taxes for revenue, forcing officials to cut benefits by a quarter. Officials who run Social Security say health care programs for seniors will also be underfunded through 2024. Treasury Secretary Geithner said Washington must take steps to make the projects affordable for generations to come. The problem is that an unusually large number of people were born after World War II, and these people are reaching retirement age, increasing the number of people eligible for retirement benefits. Retirees are also living longer than ever, which increases the cost of retirement benefits. The generation born after the so-called "baby boom" is smaller, so taxing them raises less money. The problems of rising costs and lower revenues have led to deficits in Social Security programs. That leaves policymakers with a difficult choice between raising taxes or cutting benefits or both.