The nation's actuaries used the State of the Union Tuesday to call on President Obama and Congress to address the needs of the nation's aging population in the last two years of his administration.
"A concerted national strategy on policies to support systems such as retirement security and lifetime income, health care and long-term care for the elderly and public programs such as Social Security and Medicare, is long overdue," the organization said.
It noted that Social Security turns 80 this year and that Medicare turns 50.
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"Retirement is one of the most important issues that we're faced with," Donald Fuerst, senior pension fellow at the American Academy of Actuaries, said in an interview on Tuesday hours before President Obama was set to deliver his annual State of the Union address.
He highlighted the need of the government to respond to how the Disability Insurance Trust Fund will be unable to pay 100 percent of benefits toward the end of 2016.
Fuerst said the situation would impact "some of the most needy people in the country."
"It's very important that we find a solution that enables full benefits to these people," he added.
Without any changes, there could be a 19 percent reduction in benefits, according to news reports. The actuaries group said it supports the current benefit structure and does not want to see a reduction in benefits.
The "most obvious option," Fuerst explained, is to reallocate income from Social Security's old-age fund to the disability fund. But that avoids solving problems for the long-term, he said.
"The financing issues of Social Security should be addressed sooner rather than later," Fuerst said.
If the government waited until 2033 to act, when the old-age fund is projected to be unable to make full payments, there will be fewer available solutions, Fuerst said.
Beyond Social Security, there is a need to increase the coverage of workers in retirement plans. Fuerst called Obama's MyRA program, unveiled last year, a "step in the right direction," but said more needs to be done. MyRAs are similar to a Roth IRA. Overall, Fuerst would prefer a single federal plan that is portable among all 50 states.
Retirement issues are particularly a concern because of the "graying" of the U.S. population, Fuerst said.
The average age in the United States is rising. There was a drop in birth rates starting in the middle of the 1960s. At the same time, life expectancy is increasing. As a result, the U.S. median age this year is 37.8, compared to 28.1 in 1970. It will be 42 in 2045, according to data from the Census Bureau.
Even though the workforce is growing, the number of retirees is growing a lot more rapidly, Fuerst added.
"The aging of America calls for a new shared commitment to raise awareness of the needs of the aging population and to seek creative solutions to address those needs, whether through new approaches, additional efforts to make existing approaches sustainable, or a combination of both," Academy President Mary D. Miller said in a statement. "We believe more needs to be done to immediately address the challenges of aging, including an examination of major public programs and policies."
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