Welcome to Trump’s America, The i Paper’s World Insight series presenting the sharpest, deepest thinking on an era-defining shift in history and politics, investigating how Donald Trump and his administration have changed the US and the world – and where we go from here.
• How America’s conspiracy theorists broke the US
• The US is becoming impossible to live in
• I told Trump over dinner he didn’t have my loyalty – it sealed my fate
• This is how the world will look after Trump
• I’ve seen what ICE has done to Minnesota. Farage wants to import that to the UK
• The men who want to stop women voting
• Trump isn’t damaging America. He’s reinventing it’
Dreaming about retirement is an American obsession: this is an immigrant society where people work their socks off to provide a better future for their children.
At 57, I hope my golden years will be lived out in “coastal Grandma” style, full of grandchildren, beach walks, photogenic dogs and some watercolour painting before cocktail hour. I’m already learning bridge and Mahjong – next on the list is Canasta. I plan on escaping the bitterly cold New York City winters by flying south to Florida for a few weeks a year, where I’ll play tennis and make new friends.
The hope is that at some point you can stop working yourself into the ground and enjoy the fruits of your labours. But if you can’t afford to retire, you’ll just have to keep working. The bills keep on coming, as the owner of my local pet shop observed, while we were comparing notes on our recently replaced hips – they’re made of titanium and will outlast us, which is one less thing to worry about.
How much money do you need to retire comfortably in America? It’s a question that millions grapple with – and earlier this month, those nearing retirement age received a nasty shock. Retirees, who currently receive $2,081 (£1,570) month in social security checks on average, could face a 22 per cent reduction in benefits by the end of 2032.
Here’s the alarming news. The retirement safety net, established in 1935 and funded by payroll taxes, is running out of money. The trustees of the US Social Security system have projected a shortfall in the fund’s surplus unless Congress acts. And soon.
Why? The fund is collecting fewer taxes as a result of President Trump’s Big Beautiful Bill, plus tax revenues overall are shrinking due to declining fertility rates and reduced immigration. And Social Security’s finances are under pressure because the US population is ageing.
Baby boomers are retiring – and collecting their social security checks. Congress is expected to find a fix as retirees are the most reliable voting bloc in America. But with the US national debt exceeding GDP, there is a limit to the amount of creative accounting which can be done without freaking out the bond markets and further driving up the cost of borrowing.
In the 1950s, seniors made up a mere eight per cent of the population. In 2024, that percentage had increased to 18 per cent – and by 2030, more than a fifth of Americans are projected to be over the age of 65. America is greying – and that’s expensive.
Laura Trevelyan, a naturalised American citizen, dreams of escaping the bitterly cold New York City winters in her retirement by flying to Florida (Photo: Kelley Holmgren)
Eek. I recently logged into my social security account to see how much I will be eligible for every month should I wait until I’m 67, which is what’s known here as Full Retirement Age, to claim retirement benefits. You can claim Social Security at 62, known as Early Claiming, but you get less. The monthly amount I would get looks OK should I wait 10 years to start claiming – but not if the fund is running out of money. If I am going to be part of the first generation to face cuts in Social Security, I’m willing to bet that our benefits will be reduced by a lot more than 22 per cent.
Then there’s rising inflation. Grocery bills are up almost 25 per cent since the pandemic, and now the war with Iran and the closure of the Strait of Hormuz have driven up energy costs which are feeding their way into the price of everything. If you add fears about permanently high inflation to worries about the health of entitlement programmes, it’s not surprising that just 61 per cent of Americans are very or somewhat confident about having enough resources for retirement. That’s down considerably from a high of 72 per cent in 2021.
The richest Americans have become even richer because the stock market has been booming – take Elon Musk, as an extreme example, who became a trillionaire last Friday when his Space X rocket company made its stock market debut. The wealthiest 10 per cent of Americans own 87 per cent of all stocks – so they’re seeing the benefits of the AI boom which is driving Wall Street trading to new heights, at least for now. Musk and his fellow tech bros don’t need to worry about affording their old age. But everyone else is dealing with higher home insurance due to more frequent flooding and fires as the climate gets warmer, stubborn inflation and the prospect of a social safety net which has huge holes in it.
Most Americans simply aspire to living in dignity in old age. A recent survey from an insurance company found that roughly 70 per cent of US workers who haven’t retired yet have considered pushing back their retirement date. Nearly half of those surveyed said they were afraid they wouldn’t have enough money to retire. Other research suggests that about 58 per cent of workers retire earlier than they intended – typically because of poor health, being laid off and caring for family members – with just 21 per cent of those surveyed saying they retired early because they could afford it.
Retirement may not be a choice. Yet if you don’t have enough money to retire and you’re forced out of full time work by ill health, you could be forced to stack shelves at a supermarket part-time just to make ends meet.
The future of healthcare is another worry for older Americans. My older friends tell me how much they love Medicare – the federal health insurance programme for the over 65s. While not entirely free – there are things like deductibles and fixed fees towards doctor’s visits and prescriptions which you have to pay – provided you or your spouse worked and paid Medicare taxes for enough years then you’re eligible.
Medicare is a little like the NHS, but only for seniors, my retired pals tell me. If you never paid Medicare taxes, then you have to pay a monthly premium to get the care. Confused? Welcome to the American health insurance system. So while the encouraging news is that Medicare exists – the bad news is that it too is facing a financial cliff. By 2033, Medicare’s revenues will only cover 89 per cent of the costs, thanks to taxes being reduced.
On top of the uncertainty surrounding the future of pensions and healthcare is the question of who will take care of us as we age. America is the ultimate mobile society, and it’s a geographically vast one. Many of my friends live thousands of miles away from their ageing parents, and aren’t in a position to look after them. While many elderly Americans can live at home independently, others need care at home or in a residential home.
Immigrants make up an estimated 28 per cent of the workforce in the long-term care industry, and care has reportedly been disrupted at homes as workers are too scared to show up after Donald Trump’s immigration crackdown ended deportation protections for thousands of migrants with temporary legal status. The Supreme Court is expected to rule on the legality of the Trump administration’s bid to end what’s known as temporary protected status (TPS) in July. If the administration prevails, the question of who will work in the care industry remains a pressing one.
The US fertility rate is also declining – which could leave us with fewer younger working adults to look after an ageing population and fewer taxpayers to support our social services programmes. Immigrants traditionally drive population growth – so if the Maga movement succeeds in curbing immigration in the long term, we could have a shrinking population and fewer people prepared to work in nursing homes.
As America’s pensioners worry about their financial futures, and who will care for them in their old age, two members of Congress introduced a bill last week to create an independent commission charged with finding “common sense” solutions to ensure the survival of social security. More of that kind of sensible thinking, please, I say as a naturalised American citizen who hopes to enjoy her golden years on this side of the pond.