Final answer:
A 65-year-old couple retiring in 2013 is estimated to need $283,000 to cover medical expenses with Medicare. The long-term budget outlook for Social Security and Medicare is challenging, with increased spending due to an aging population and current funding mechanisms expected to fall short.
Step-by-step explanation:
The amount of money that a 65-year-old couple retiring in 2013 will need to cover future medical expenses, even with Medicare, is estimated at $283,000, according to the Employee Benefit Research Institute (EBRI). This figure underscores the fact that health care is expensive and that savings for medical costs in retirement are essential.
Long-term Budget Outlook for Social Security and Medicare
The demographics of the United States are shifting, resulting in more elderly Americans who will rely on Social Security and Medicare. By 2030, it is projected that one in five Americans will be over age 65, leading to increased spending on these programs. The payroll tax, which currently funds Social Security and part of Medicare, is expected to fall short of covering anticipated costs. Potential options to address this funding shortfall include increasing taxes, reducing other government spending, raising the retirement age, or the government running large budget deficits.