How Will the Recession Affect Your Social Security and Medicare Benefits?

Social Security and Medicare have been on a collision course with reality for years, as lawmakers have struggled to find some way to keep the programs viable for current and future beneficiaries. In 2008, spending on Social Security and Medicare totaled more than $1 trillion, accounting for more than one-third of the federal budget.

According to the 2009 Social Security and Medicare Trustees Report, which was released in May 2009, two new projections show how the recession is affecting Social Security and Medicare:

1. The Medicare fund that pays hospital bills for older Americans (Part A) is now expected to run out of money in 2017—two years sooner than projected in 2008.
2. The Social Security trust fund will be depleted in 2037, four years earlier than previously projected.

Just like the banking and auto industries, and nearly every household in the United States, Social Security and Medicare are feeling the effects of the recession.