Let’s talk about Medicare


Medicare is a federal health insurance program for people who are 65 or older and certain younger people with disabilities.  Today, there are 57 million beneficiaries. 18% or almost one out of every five people in our country is on Medicare. By 2030 those will be at last 80 million people on Medicare or close to one out of every four Americans. Pretty soon the whole country will look like Florida!   Please remember that 70% of the Baby Boomers retire between 2022 and 2029.

The unfunded liability for Social Security is around $15 trillion. The unfunded liability for Medicare is around $100 trillion. Medicare is predicted to go bankrupt in 2029. If we have an economic downturn that date could move up to less than a decade from now. 

This problem of Medicare is amplified by life expectancy. When Medicare was enacted in 1965, the actuarial life expectancy of an American was 70 years old. For men reaching age 65, that life expectancy is now age 86 and for women reaching age 65 their life expectancy is age 88. The program was not designed for people to live that long. The entitlement of having access to quality health care for Americans over age 65 has created an economic disaster that no one in government seems to want to take on.

 Current statistics estimate that current retirees will face $400,000 to $600,000 in healthcare cost during their retirements. That will essentially consume all of their social security checks to pay for healthcare costs.   If 100% of your social security check is used for health care, what will people use for food, clothing and shelter? 

 As of today, only 10% of Americans have over $110,000 in assets.  ONLY 10%!  What will the other 90% of Americas do?  Do you think our politicians will let them starve, live on the streets, or deny access to health care?  How will our government pay for this? 

 The amount of money necessary to deal with all these issues is astonishing.   Remember, our government does not make money…they TAX to get money.  When the government needs more money to fund programs like Social Security, Medicare, Medicaid, Obama Care, Homeland Security, Defense, Interest on the debt, natural disasters, ect…will they get the money from the 90% of people who don’t have any money or the 10% that do? 

Planning is the key to success.  Understanding the future of our country should motivate you to take action today to protect your wealth in the future.  The best time to plant a tree was 20 years ago, the next best time is today!

 Today’s lesson – Health care in retirement will eat up an exorbitant amount of retirement assets even with Medicare as a supplement.    And, in Medicare’s current form, it is unsustainable.