Baby boomers grew up skeptical of authority, so it's hardly surprising that some of them doubt the government will deliver the full Social Security and Medicare benefits it has promised.
Bruce Benton, who turns 62 on Bastille Day, July 14, is one of them. He plans to file for early Social Security payments rather than wait till age 65 to draw a larger monthly check. He says his move is calculated, in part, to protect his benefits from possible cuts by Washington.
"I doubt very much it's going to change much for those people already drawing" benefits, Benton says. "It can't hurt to get locked in."
Will boomers see their benefits diminished during their long retirements?
It's impossible to say for sure. Aware of their political muscle, Congress will likely try to shield those in or near retirement from cutbacks in Social Security benefits. But a rough consensus among experts is that a projected long-term explosion of health care costs could force sweeping changes in both Medicare and private health insurance.
Peter Orszag, head of the non-partisan Congressional Budget Office, warns that delaying tactics by lawmakers will only put the programs and the economy at greater risk. If Congress fails to act, the CBO cautions, the result will be swollen debt and deficits, higher inflation and reduced living standards.
The coming surge in federal health and retirement spending may be one case where boomers, for all their size, can't control their destiny. Polls have shown that a majority of those 55 and older consider Social Security in crisis, rising to about 70% for younger people. Medicare draws less attention from boomers, even though it faces far more severe projected shortfalls than Social Security does.
Social Security's long-term financing gap is due mainly to the aging of the baby boomers, rising life expectancy and the fact that fewer workers will be paying Social Security taxes to support more retirees.
The solution isn't to tap your Social Security benefits at 62 — the earliest age of eligibility and the age the oldest boomers turn this year. Doing so could shrink your lifetime benefits. In any case, many plans to reform Social Security would protect those 55 and older from cuts.
Nor is there much that boomers can do to shield themselves from possible reductions in Medicare, which are being driven more by escalating health costs than by the aging population. Without changes, combined spending on Medicare for elderly and Medicaid health care for the poor is projected to jump from 4% of the overall economy to 19% by 2082, thereby crowding out spending for other programs, the Congressional Budget Office says.
The American Academy of Actuaries says eliminating the 75-year Medicare deficit would require an immediate 122% increase in the 2.9% Medicare payroll tax, a 51% cut in benefits, or a combination of the two.
"Changes are on the long-term horizon, but it doesn't appear that major changes are imminent in the short term," says Tricia Neuman of the Kaiser Family Foundation. "The good news for people who are approaching Medicare age is that there is now a drug benefit."
Some boomers seem to be banking on a third option: that Congress will remain so mired in gridlock that politicians won't be able to agree on major program changes.