Why Social Security Gets Sicker As We Get Healthier

Baby Boomers are now 62 to 80 years-old:

With most at or past the retirement threshold, Baby Boomer income and spending have shifted.

Social Security Spending

Although Baby Boomers no longer have paychecks, they continue to spend. Retiring at a faster pace because of record household wealth, they have been spending on fun-related activities. Also, they have been “giving while living” to their adult children.

In addition to their savings, Baby Boomers are spending their Social Security checks. Increasing the total to 53.6 million, during 2025, a record 1.85 million retirees became Social Security recipients.

Below, you can see the pop in people getting Social Security:

According to a new paper 80 is the new 75. With Baby Boomer longevity up by 2.4 healthy years, at 66 we can expect to live another 20 years. Having added those 2.4 years between 1993 and 2017 means we get additional Social Security checks that average $18,000 per person.

Consequently, Social Security spending goes up by approximately 14%:

Our Bottom Line: Social Security Tradeoffs

As economists, we can always expect a tradeoff.

Because of their savings and Social Security checks, Baby Boomers are enjoying their record household wealth during longer lives. The downside though is the depletion of the Social Security Trust Fund.

With 70 million individuals receiving Social Security benefits, we wind up with a $160.2 billion shortfall. One reason is a pay-as-you-go system through which the tax revenue from current workers that goes to current Social Security recipients has been inadequate since 2021. However, the shortfall does not matter YET because a Social Security trust fund makes up the difference when the program’s costs exceed its revenue.

But, if all continues as the Trustees predict, little by little, the trust fund will shrink until 2032 when it will be empty. Having inadequate income, the System’s payout would have to be 78% of “scheduled benefits.”

So yes, we are trading living longer for a healthy Social Security system.

My sources and more: It is always wonderful when two disparate papers create an insightful synergy. Several weeks ago, my Hutchins Center Roundup email alerted me to a new paper on Social Security. Then, yesterday, I discovered economist Ed Yardeni’s comments on the baby boomers’ wealth and a G economy.

Please note that several of today’s sentences were in a past econlife post.