As the Congress “sprints” this week towards a possible vote on the budget reconciliation bill (aka the “One Big Beautiful Bill”), it has become rather apparent that there is an aversion to addressing the glaringly obvious (future) issues swirling around social security. This year nearly 69 million Americans will share approximately $1.6 trillion in benefits rendered, making it quite simply one of the largest economic transfers in our country.
And it is a third rail given that it will be insolvent in less than a dozen years, arguably sooner should the current Administration get its way. In fact, behind the Department of Health and Human Services, the Social Security Administration (SSA) was the second most funded federal agency in 2024 with $1.52 trillion spent of the $6.78 trillion total federal spending. The SSA accounts for only 2.5% of the federal workforce but manages 22.4% of all federal expenditures.
Percent of Federal Spending Agency (2024)
Source: Office of Budget and Management, Department of Treasury
Social security is a “pay-as-you-go” model and today sits with $2.7 trillion in assets, all in treasury securities. Importantly, overall social security benefits have increased more than 210% since 1980, outstripping the 190% growth in overall federal spending; the U.S. population grew 48% over that same period. In 1980, social security benefits totaled $487 billion at an average monthly benefit of $340 (inflation adjusted to today’s dollars would be $1,326) as compared to the average benefit payment today of $1,979.
Notwithstanding that it is estimated that there are $43 trillion of retirement assets in the U.S. (as of 3/31/25), which is thought to be 34% of all household assets and relatively concentrated to the upper strata of society, one of the principle concerns is the ageing population, obviously. According to the Census Bureau, those older than 65 grew by 3.1% between 2023 and 2024 while those younger than 18 dropped by 0.2%. The cohort of 65+ now represents 18.0% of the population, up from 12.4% just twenty years ago; those below 18 dropped to 21.5% from 25.0% of the population over that same period. In 2024, 45% of all counties had more people older than 65 than younger than 18.
Change in Population (2020-2024)
Source: Census Bureau
The SSA was established in 1935 to limit the amount of retiree poverty and at a time when it was hard to contemplate a country ageing at such a profound rate. The intention was to provide disability and survivorship benefits for a relatively limited period of time on a graduated scale tied to lifetime earnings. People became eligible for partial benefits at the age of 62, full benefits at 65. The average life expectancy in the U.S. in 1935 was 61.7 years; now it is 77.4 years, putting significant additional strain on the system.
Additionally, this transition to a meaningfully older population has dramatically reduced the relative number of workers contributing to the trust funds. There are approximately 30 beneficiaries for every 100 working age people today. This “dependency ratio” is expected to spike to 55 by the end of the century. Social security taxes will need to increase and/or benefits will need to be reduced or “means tested” otherwise the system likely topples over in the next decade or so.
Working Age vs. Retirement Age Population
Source: Social Security Administration
While social security does not directly cover medical expenses, Medicare and Medicaid payments naturally intersect with social security benefits when there are significant out-of-pocket expenses, deductibles, and co-pays that are not covered. This will likely be made even more burdensome should the “megabill” pass which promises to dramatically reduce healthcare coverage and benefits. While slightly dated, a 2019 study by AARP concluded that social security beneficiaries incurred on average approximately $6,700 in annual out-of-pocket healthcare costs against $17,500 in total benefits.
Related, to underscore the healthcare cost burden, the recent Milliman Medical Index concluded that a family of four on an employer health plan incurs over $35,000 of healthcare costs annually. This was just over $12,000 twenty years ago.
Total Cost of Healthcare for Family of Four
Source: Milliman Medical Index (2025)
Concurrent with the debate on healthcare costs and how they are to be treated in the “megabill” is the ever-present anxiety about medical debt, another significant burden often borne by those least equipped to manage it. A 2024 study by Peterson-KFF determined that there was approximately $220 billion of accumulated medical debt in the U.S.
Over 14 million people are carrying at least $1,000 of medical debt while three million have more than $10,000. Just this month the recently knee-capped Consumer Financial Protection Bureau reversed a policy to exclude medical debt from credit reports. Now it appears that $49 billion of such debt will resurface on millions of credit reports, possibly improving the chance of collection as individuals may be more compelled to settle those obligations, but likely to make accessing more affordable funds more challenging.
All these economic forces (i.e., headwinds) continue to underscore the need for compelling technologies to engage, inform, activate, and manage the older members of society. One of the most effective ways to lower healthcare costs is to invest in maintaining a healthy populace. Longevity Technology tallied $8.5 billion invested in 331 venture capital deals globally in 2024 focused on the longevity sector. According to 4Gen Ventures, a firm focused on “agetech” investing, it is estimated the market opportunity globally to be $2 trillion. Some estimates are that the Boomer generation will have $30 trillion of spending power in 2030.
Fear not, though. Lost amid all the noise and confusion around the “megabill” (oh, and bombing Iran, the wars in Gaza and Ukraine, the Bezos wedding) was the news that Edward “Big Balls” Coristine, once a proud member of DOGE, has joined SSA this week as a special government employee. If anyone can sort out social security, it will be a 19-year-old college student with a limited liability company called TESLA.SEXY. We are all saved…
And please join us for our next quarterly Expert Roundtable Series webinar on September 23, 2025, at noon ET. And subscribe here to follow other news and insights from Flare Capital Partners.