If you have followed the news over the last several months it’s no secret that there are a lot of concerns about the federal budget deficit. Since the political climate in Washington shifted after the midterm elections there is more serious resolve about slashing federal spending. And when you look for the most significant outlays of money you can’t help but notice that a large portion of the federal budget is consumed by entitlement programs for senior citizens.
According to the Center on Budget and Policy Priorities, Social Security spending accounted for 20% of the federal budget in 2010, and Medicare consumed 14% of it. If you are someone on Capitol Hill who is passionate about reducing federal spending it would be difficult to overlook the sources of over a third of it, especially when you stir this next fact into the mix.
Because the baby boomer generation is reaching retirement age, there are 10,000 people applying for Social Security for the first time every day as of this writing. If that wasn’t enough to get your attention, this volume of daily applications is going to be the norm for the next two decades. So at a time when many politicians are bursting at the seams with passion for reducing federal spending, we are adding 10,000 new entitlement recipients onto the Social Security and Medicare rolls daily.
We have no way of knowing exactly what the future holds with regard to Social Security and Medicare. But the huge influx of recipients can only increase entitlement expenditures if the system remains intact as it is today. At the same time we have a huge federal deficit and a lot of legislators on Capitol Hill who want to reduce it considerably without raising taxes. It is difficult to envision how the deficit could be reduced while we continue to increase Social Security and Medicare spending, so if you are planning your retirement you may want to pay attention to the budget wranglings as they continue to unfold in Washington.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
Latest posts by Paul A. Kraft, Estate Planning Attorney (see all)
- Can’t I Just Transfer Assets to My Adult Child If I Need to Qualify for Medicaid? - July 19, 2019
- What Type of Will Is Best for Me? - July 17, 2019
- Ways to Avoid Probate - July 15, 2019