You Are Paying for Retirees' Lavish Lifestyles
How America's old-age entitlement system became a sprawling lifestyle-subsidy program that steals from the poor to give to the rich.
As he celebrated the 50th anniversary of Social Security, then–Speaker of the House Tip O'Neill (D–Mass.) hailed the program's epic accomplishments.
In the days before Social Security was born, O'Neill said, "Life for the elderly is filled with uncertainty, dependency, and horror. When you get old, you are without income, without hope." The federal government's payments to retirees, he continued, meant that Americans no longer had to live in "fear and dependency" in old age.
It was a tidy summary of the conventional wisdom surrounding America's old-age entitlement state—which includes not just Social Security, but also Medicare and many other taxpayer-funded efforts to subsidize the supposedly nasty, brutish, and not-so-short lives of the over-65 crowd.
It is a narrative that deserves to be shoved off a cliff.
Today's retirees, most of them from the baby boomer generation, are the wealthiest cohort of Americans. The median household headed by someone over age 65 is far wealthier than the average household headed by someone in their late 30s.
Despite that, roughly 22 cents of every dollar the federal government spent last year was funneled to retirees via Social Security. Medicare spending accounted for another 14 percent. Many of those dollars were extracted from younger, poorer Americans. (The rest were borrowed and added to the national debt.)
A retired couple today might possess a robust retirement account and own a million-dollar home, but the government still acts as if they live in the poverty-stricken hellscape that O'Neill described. And as the old have gotten wealthier, the taxpayer-funded benefits have only gotten more lavish.
Social Security provides inflation-proof monthly payments, keeping retirees ahead of the curve even as working-age Americans struggle to make ends meet. In many places, seniors are gifted special exemptions from taxes on homes and vehicles that aren't available to younger Americans. Medicare, created to address seniors' medical needs, now offers such taxpayer-funded perks as discounted golf course fees, ski resort lift tickets, even pet supplies and pickleball equipment.
In short: Today's old-age entitlement system is not a last-resort guardrail against poverty and desolation. It is a sprawling, expensive lifestyle-subsidy program that steals from the poor to give to the rich—while also worsening the housing crisis and pushing the country toward a dangerous fiscal cliff.
It's one thing to believe that we have a moral, political, or economic imperative to protect the elderly from falling into poverty. But does that mean we should risk the future of the United States to pay for their vacations and their pets' flea shampoo too?
Medicare (Unfair) Advantage
San Diego County, California, is one of the wealthiest parts of America. Its population of 3.3 million boasts more than 100,000 millionaire households and a total economic output higher than that of Greece.
And when the retired denizens of San Diego County hit the links for an afternoon, poorer taxpayers working in far less desirable parts of the country help to pick up the tab.
That's because retirees in southern California who have enrolled in Clever Care's Medicare Advantage program get reduced greens fees at the Oceanside Golf Course (and five other courses in the area). Those types of "health and wellness" benefits have become increasingly common under Medicare Advantage, which was created in 1997 as an alternative to traditional Medicaid but is still funded by federal payroll taxes.
A provision tucked into a 2018 budget bill loosened the rules for those supplemental benefits to allow Medicare Advantage plans to offer any perks with a "reasonable expectation of improving or maintaining the health or overall function" of enrollees. Those supplementary benefits are available to anyone who has a chronic health condition—which isn't much of a barrier, since 95 percent of the Medicare population qualifies.
Those benefits often include services that have basically nothing to do with health care: things like transportation services, grocery discounts, pest control, and a wide range of "non-fitness" social club memberships, according to a 2019 memo published by the Centers for Medicare & Medicaid Services (CMS).
One Medicare Advantage plan available through Aetna advertises discounts for "pickleball fees, golf green fees, ski/lift passes and fees, bowling, yoga, stretching, dance classes," and more. A plan offered by Humana promises coverage for "pet food, pet toys, kitty litter, and flea shampoo."
More than 400 Medicare Advantage plans offered to pay for pet services in 2024, according to a survey by ATI Advisory, a research firm that tracks health care plans' offerings. More than 170 plans offered coverage for barbering and beauty services, while 137 offered travel services. In all, ATI estimates that more than 10 million older Americans had access to a Medicare Advantage plan that offered nonmedical "supplemental benefits."
All of that comes at a tremendous cost to taxpayers. Though it is operated by private companies rather than the federal government, Medicare Advantage is funded by payroll taxes.
The exact tally of the cost is difficult to pin down.
In 2022, those "supplemental benefits" offered by Medicare Advantage plans cost $6.4 billion, according to a 2023 Government Accountability Office report. But as the auditors noted in that study, there was little awareness about how the money was actually being spent, as CMS "did not have a workplan or timeline for" determining whether those extra goodies actually "support the health and social needs of Medicare enrollees."
"Not all supplemental benefits are necessarily inappropriate," says Chris Pope, a senior fellow at the Manhattan Institute who has been calling out the wasteful perks in Medicare Advantage plans. In some cases, those benefits might produce cost savings relative to what the government would have to cover in the traditional fee-for-service Medicare model.
However, Pope's research shows that those benefits are a growing burden for taxpayers. Between 2015 and 2024, the per-beneficiary cost of those supplemental benefits rose from $960 to more than $2,500.
Medicare Advantage was created with the intention of reducing Medicare costs. Today, however, it is more expensive. In 2025, Medicare Advantage payments were 20 percent higher, which meant an extra $84 billion in costs, according to KFF, a think tank focused on health care policy. More than half of all eligible beneficiaries are now enrolled in Medicare Advantage plans, up from less than 20 percent two decades ago.
The supplemental benefits are not the only reason why Medicare Advantage tends to cost more, but there's no doubt that they are a contributing factor.
The overall trajectories are undeniable, too. Medicare is already the single largest driver of the national debt, and its spending growth is expected to outpace every other portion of the federal budget over the coming decades. Seniors today are getting more and better taxpayer-funded benefits than ever before, all paid for with tax dollars and huge amounts of borrowing.
Given those trends, the supplemental benefit costs would be worth scrutinizing even if Medicare were on a solid fiscal footing. As it is, taxpayers are paying for golf outings and pet shampoo while the program—and, with it, the federal government—is speeding toward a fiscal brick wall.
Robin Hood in Reverse
If older Americans weren't getting discounts on lift tickets and pet shampoo, they'd probably be just fine. Most of them would still be far wealthier than the working-age Americans still paying into the system.
This is the absurd reality of America's old-age entitlement state in the mid-2020s. The median household headed by someone over age 65 had a net worth of more than $400,000 in 2022, according to Federal Reserve data. For those under age 35, that figure was just $39,000.
If anything, that statistic actually underestimates the wealth gap that has opened up between the baby boomers and everyone else. Research by the New York University economist Edward Wolff shows that the inflation-adjusted average net worth of a person in the 65–74 age range has increased by 178 percent since 1989. Wolff concludes that individuals who bought stocks and homes in the 1980s—that is to say, baby boomers—were uniquely well-positioned to take advantage of rising asset prices and home values.
Measures of retired households' net worths also fail to take into account the future value of Social Security payments, which in some cases can be quite lucrative. The maximum Social Security benefit this year is more than $5,000 per month, which means that a high-earning couple could easily qualify for more than six figures in annual Social Security benefits.
This is a good opportunity to confront an objection that always gets raised when Social Security is discussed. No, today's seniors are not merely getting back what they paid into the system during their working years.
The average dual-income-earning retiree household in 2025 will receive 32 percent more in Social Security and Medicare benefits than the payroll taxes they contributed over their lifetimes, according to the Committee for a Responsible Federal Budget. Single-income households come out even farther ahead, collecting on average over 62 percent more in benefits than what they paid in taxes. That gap persists across all income levels.
Retirees are also protected against inflation in ways that working-age Americans are not. Social Security benefits come with automatic cost-of-living adjustments that take rising prices into account. In 2023, retirees got an 8.7 percent boost in their benefits because of high inflation levels. It was one of the largest cost-of-living adjustments Social Security had ever delivered.
Most workers did not get an 8.7 percent raise that year.
America's old-age entitlement system may have been designed in times when old people were more likely to be destitute or face unaffordable health care costs. But today the two major federal entitlement programs have become a reverse Robin Hood system that redistributes trillions of dollars from productive but relatively poor workers to unproductive, wealthy retirees.
There are logical reasons for older Americans to be wealthier. They've had more time to save, invest, buy property, start businesses, and so on. It's a testament to the power of America's capitalist economy that the elderly today are more prosperous than ever—and that they are, by and large, not living in the "fear and dependency" that O'Neill once invoked. That is all good news.
The problem is that government policy does not reflect this reality.
Last year, two-thirds of federal entitlement spending was targeted at the 17 percent of Americans who are over 65. Medicare cost nearly $1 trillion and Social Security redistributed $1.2 trillion to retirees.
Social Security's spending is particularly lopsided. Last year, only 7 percent of its benefits flowed to the poorest 20 percent of seniors, while the wealthiest 20 percent collected 29 percent of the payouts. Andrew Biggs, a senior fellow at the American Enterprise Institute and longtime advocate for Social Security reform, says that statistic reinforces how far the program has drifted from its original goal of saving the elderly from living in destitution.
Imagine proposing to create this system today from scratch. Would any Republican in Congress vote to drain the paychecks of manufacturing workers to subsidize retired Californians' golf habits? Would any Democrat want to tax younger, poorer people to pad the lifestyles of the already wealthy?
Sadly, both major parties are focused on giving even more special treatment to wealthy, old Americans at the expense of everyone else.
Give 'Em a Break?
When Michigan Democratic Gov. Gretchen Whitmer announced plans for a $90 million property tax break that would exclusively benefit senior citizens in her state, her administration promoted the proposal on social media.
This is the sort of thing that states and local governments have been doing routinely for years, under the logic that older Americans need or deserve to pay lower taxes so they can afford to stay in their homes even after retirement.
This time, however, the announcement backfired. The Democratic governor's post got "ratioed" on the social media app X—a term for the situation where a post gets more negative comments than "likes." Many of the critics accused Whitmer of contributing to "Total Boomer Luxury Communism," a term coined last year by Russ Greene that has become a meme in wonkier corners of the internet—and even earned its own Wikipedia page.
Greene, executive director of the Prime Mover Institute, an energy policy think tank, defines Total Boomer Luxury Communism as "a system of political economy that transfers wealth to older people at the expense of younger generations." It is a useful term encompassing everything from Social Security to special tax breaks for retirees. "America has achieved the Marxist paradise of hunting in the morning, fishing in the afternoon, rearing cattle in the evening, and criticizing after dinner," Greene wrote in a December essay for The American Mind. "Only it looks more like golf in the morning, horseback riding in the afternoon, drinks at the social club in the evening, and a restful night's sleep in a million-dollar home—all thanks to the largesse of the U.S. government."
Greene is quick to point out that he's not an economist or an entitlement policy wonk. He works on energy policy. But he's capable of doing the math and noticing social trends, and his Total Boomer Luxury Communism label serves as both a criticism and a call to action. He wants younger Americans to recognize that the old-age entitlement state is not just stealing a chunk of their paychecks; it is taking away opportunities.
Tax breaks for senior citizens, like the one Whitmer proposed earlier this year, are the perfect example.
Many states have some sort of property tax relief program for senior citizens. Like Social Security and Medicare, they may have been created with a good intention: to help older Americans make ends meet.
In reality, however, these schemes have worsened the housing crisis in important ways. Special property tax breaks incentivize retirees to stay in their homes longer than they otherwise would. A 2024 survey from Freddie Mac found that nearly 70 percent of baby boomers—who account for 20 percent of the U.S. population but 36 percent of all homeowners—planned to stay in their homes for the foreseeable future. That, in turn, reduces the number of homes on the market and likely nudges upward the price for homes that are available.
At the same time, exempting or reducing a subset of homes from property taxes almost never means the government spends less money. It means pushing the entire tax burden onto a smaller number of homeowners—in this case, all homeowners under age 65. That's fundamentally unfair for current homeowners, and it also pushes the overall cost of home ownership higher, potentially pricing out younger Americans who are hoping to buy.
As with Social Security's cost-of-living adjustments and the special perks in Medicare, older Americans are collecting all the benefits of these tax policies while younger, poorer Americans bear the costs.
The expansion of Total Boomer Luxury Communism into the tax code has been a bipartisan effort. The One Big Beautiful Bill Act, passed by Republicans in Congress and signed by President Donald Trump last year, included a provision giving senior citizens a new $6,000 deduction on their federal income taxes. That provision was included as a roundabout way of fulfilling Trump's 2024 campaign trail promise to end taxes on Social Security.
As if adding insult to injury, Trump's Treasury Department has been marketing that change as a tax cut for "working families." It is quite literally the opposite, as workers will continue to have money taken out of their paychecks to fund Social Security payments to seniors, who will exclusively benefit from the new carve-out.
It's good to be a boomer.
What Do We Owe the Wealthiest Generation?
It bears repeating: Today's retirees are the wealthiest generation in U.S. history.
That's not a criticism. The Americans born after World War II had greater educational opportunities than their parents, turned those degrees into successful careers, then parlayed that into sizable nest eggs. Their financial success is not something to envy but to emulate. Baby boomers achieved financial independence, and everyone following in their wake should aspire to the same. The days when old people were "without income, without hope" are, hopefully, gone for good.
We should simply demand that government policy recognize this reality—and change to reflect it.
The time to make changes is now, because Social Security and Medicare are both veering into insolvency. If nothing is done, Social Security benefits will be cut by an estimated 23 percent across the board in 2032, according to the program's trustees' most recent report. Because Medicare payments are more complicated—involving hospitals, other health care providers, pharmacies, and the like—that program's insolvency, which will also hit in the mid-2030s, will play out in less straightforward ways.
When insolvency hits, Congress may reach for the easiest solution: borrowing even more heavily to keep those programs running. That outcome would compound how unfair the entitlement programs are, as additional borrowing could push inflation higher. In other words, workers would be getting taxed to pay for retirees' benefits (including inflation-proof adjustments) while the dollars they are allowed to keep have less value.
As a matter of economics and logic, the status quo of America's old-age entitlement system is unsustainable and indefensible. Retirees are collecting more than they contributed, and that disconnect is contributing to a whole bunch of other problems, from rising debt to the housing crisis.
But a lot of the inertia on this topic is bound up with a moral argument: that retirees are, well, entitled to those benefits, and that any cuts are tantamount to breaking a promise.
"That social contract has already been broken. It was broken years ago, when politicians in D.C. decided to run up the federal debt to historically high levels," argues Greene. "What that means is that younger people, even people not born yet, are being forced to pay against their will for programs that don't benefit them."
The most direct fix would be requiring Congress to include Social Security and Medicare in its annual budget process. As long as those programs run on autopilot as so-called mandatory spending, their problems are easier to ignore. If members of Congress had to vote every year on siphoning money from poor workers to pay wealthy retirees, that calculus might change. Would those finite tax dollars be better spent on other priorities? Would it be better if we didn't extract that cash from workers in the first place?
Today, less than 7 percent of senior citizens are living below the poverty line. Reconstituting the entitlement state to help them—and others on the lower end of the income scale—should be possible without continuing to subsidize the lifestyles of the rich and elderly. In 2022, the Congressional Budget Office calculated that Social Security's insolvency could be fixed by giving all seniors a flat monthly payment equal to 150 percent of the federal poverty line—about $1,700 per month. That's not an ideal solution, as it wouldn't save workers from continuing to pay payroll taxes, but it would be a huge improvement over the status quo and would ensure seniors are kept out of poverty. If even that change is too ambitious for right now, it's still encouraging to see some small attempts to curb Total Boomer Luxury Communism.
In January, the Trump administration announced that it would be increasing payments to Medicare Advantage providers by just 0.09 percent this year—a huge drop from the 5 percent payment increase those providers got last year and well below other recent increases. That change sent some of the major providers scrambling to lobby for more money. If the administration sticks to its guns, that may help to temper insurers' push to get more seniors into Medicare Advantage (often by luring them with those outlandish perks). New rules issued by CMS limit some Medicare Advantage perks by blocking coverage for face-lifts and other cosmetic surgeries, funeral costs, and alcohol, tobacco, and cannabis products. The fact that Medicare was apparently paying for booze and smokes in the first place should say a lot about how few restrictions there are on Medicare Advantage perks.
The administration is also considering changes that will increase reporting from insurers about how those supplemental benefits are being used. Pope believes those changes will curb some of the excessive spending on frivolous things such as pet shampoo and haircuts. "That said, there hasn't been a structural change" to the rules governing the supplemental benefits for the chronically ill, he adds. "There certainly hasn't been any direct move to eliminate ski or golf benefits."
The moral argument that the government should tax young people to pay for such benefits is bunk. Today it is not the old but the young who are facing the terrifying uncertainty of a fiscal crisis—one brought on by the federal government's insistence that wealthy old people have a categorical right to welfare.
It is one thing to support those in need. Everyone else should pay for their own damn golf outings.