Retirement Nomads: Too poor to retire and too young to die
Here&#x27;s a breakdown of the US 2015 combined (Federal, State, Local) government spend:<p><pre><code>  Total Spend: 6.18tn
  Total Revenue: 6.08tn

  Healthcare: 1.32tn     (21.3%)
  Pension: 1.20tn        (19.7%)
  Education: 0.93tn      (14.8%)
  Defense: 0.80tn        (13.1%)
  Welfare: 0.50tn         (8.2%)
  Other*: 1.43tn         (23.1%)

  *Other = Protection, Transportation, General Government, Interest
</code></pre>
Currently, social security is taking in ~$74bn less in payroll taxes than it pays out in benefits. The $2.83tn fund is invested in federal debt that pays 3.4% interest. So the interest payment (from the Federal government) of $96.2b is enough to cover the deficit.<p>By 2020, interest will no longer be enough to cover the deficit between revenue in from taxes and expenditures out to retirees. At that point, the SS fund will need to start redeeming treasuries for cash. The federal government will then need to issue new debt and&#x2F;or raise taxes to cover SS treasury bond redemptions.<p>If the Federal Reserve follows through in its quest to raise interest rates and inflation, it will be relatively expensive to raise the $2.83tn in debt that we will need to fund SS through 2029, when it is projected to completely deplete its reserves of treasury notes. At this point, SS will only be able to pay out 75% of promised benefits given the current tax rate and demographic trends.<p>Healthcare expenses lean heavily towards the old but are funded by the working age population. What happens as the birth rate decreases and the average individual lives longer? Expenses increase for the working-age population.<p>I&#x27;m less concerned about spend on education (which is broken) than I am about how we plan to fund our health care and pension systems. The only feasible way I can see is through increased taxation. I just started working last year. Hell of a time to enter the work force!
Overall it seems to me like we are paying an increasing amount of our federal budget on the older population than we anticipated we would need to and that we did not adequately provision for.