More and more talk recently about the fact that Social Security is on the fast decline has left many people, especially those around the retirement age, wondering what they are going to do for their income when they retire and the system falls through. The fact that this system is disappearing is quickly turning into a major problem because there is a large percentage of the economy that is on the verge of retiring and they are going to need money for that. How, though, will they receive this money if it no longer exists?
Social Security is a system that is set up in the United States that helps people of old age still have a source of income after they retire. It even helps some people who have medical issues and are not able to work. Everyone that does work, however, has to pay a percentage of every paycheck they make towards the Social Security fund to help the people who need it. Then, at a certain age, when people are eligible for it, they start receiving payments from it while other people continue to pay into it. But for some time now, there has begun to be more people taking money out of the fund than putting money in to the fund. It is said that “after 2017, the U.S. Treasury will have to sell more public debt to finance the Social Security deficit” (Pozen 54). While some people continue to refuse that there is actually a problem with Social Security at all, it has been proven that the system is slowly but surely disappearing; in order to fix this growing problem, the head officials in the government are going to need to step up, admit what is going wrong, and start coming up with logical solutions that everybody is going to be happy with to fix it.
A lot of people are questioning why so many think that there is a probl...
... middle of paper ...
...rmal Retirement Age is set to slowly increase to 67, compared to the age of 65 that it’s set at right now, by the year 2027 (Pozen 58). With the increase in the Normal Retirement Age, it will give people a little bit more time to figure out how to save their money, as well as a couple more years of work to earn money to invest or save. Although a lot of things about the future of Social Security remain uncertain, there is one thing that remains the same: “If we do nothing about Social Security, it is doomed to become insolvent in 2041” (Pozen 62). The fact that some professionals have begun to start proposing a few solutions as to how the country can try to get more money back in to the Social Security system is a wonderful thing, but there is still a lot of work that needs to be done if they younger citizens of America plan to still be able to retire comfortably.
Social Security is a system that was set up in 1935 after the Great depression to help people get through tough times. "Social Security is now used by nearly 44 million Americans"(policy.com). Only people who payed into social security are eligible to collect when they retire. Many people think that they receive the money they pay in but that is not total true. The money that you pay in is used for the people that are receiving it now. "In 1950 there were 16 workers for every beneficiary; today there are only three workers per beneficiary"(policy.com). There is more money going into social security then coming out now. The extra money goes into a trust to be used when it is needed. By the year 2032 those numbers are going to drop. By this time most baby boomers will be retired and collecting social security. This will put a big strain on the funds. There will be more money going out then coming in. And it will not take long to use all the money that is in the trust. By the year 2034 they will only be able to pay 75 percent of the beneficiaries. "The projected average monthly Social Security benefit in 2032 of about 1,100 (in 1998 dollars) would fall to about $800, and would drop further in later years. Average benefits for low-wage earners would drop from $670 to $480"(www.ssab). Theses cut would effect the people just starting to receive benefits and those who are already receiving benefits. And with each year these benefits will decrease. As these benefits continue to decrease "the percentage of aged people living in poverty would rise"(www.ssab).Most people believe this is happening because of the baby boomers generation. There will be more people taking from social security then giving in. By the time my generation is eliable to receive social security there may not be any money to give.
The White House, along with the politically biased Social Security trustees’, argue that Social Security is facing a crisis in that “the currently legislated structure of revenues and benefits, the system will eventually be unable to meet its financial obligations” (Bethel University, 2006, p.344). At its inception in the 1930’s, “there were more than sixteen workers to support each Social Security recipient. Today, there are about three, and in 2031, that number is predicted to dwindle to about two (Driscoll & Konczal, 2009). And the number of retirees is expected to nearly double from about 37 million to around 73 million (Driscoll & Konczal, 2009). So how to pay for this? The White House’s proposed solution is to establish individual retirement accounts which would be gradually phased in for younger entrants into the workforce allowing them “to build a “nest egg” for retirement…” (Bethel University, 2006, p.347) while maintaining the existing structure for those 55 or older. Other seemingly attractive features are ownership and control, the ability to in...
Today, the future of Social Security is in the news again. The reason Social Security is of such concern is that the extremely large group of citizens born in the post-World War II period—the much-discussed baby-boom generation—is retiring. The generation that will take its place in the workforce is far smaller in proportion to the number of retirees, raising fears about the sustainability of Social Security. In the past, proposed solutions to the various problems facing Social Security aroused great debate. Each time, however, the arguments were stilled, repairs were made, and the system continued to fulfill its mandate. That uncertainty about the future has resulted in suggestions for change that range from minor adjustments to complete privatization of the ...
A better way to measure the financial trouble facing Social Security is to compare the promised total future benefits to the program 's total future taxes on a present value basis. Unless policymakers cut Social Security and other programs, the fiscal and economic outlook for the nation looks grim. The large baby boomer generation is beginning to retire in droves and average life spans in the nation are continuing to rise. Those changing demographics are driving Social Security 's financial imbalances. When Social Security was created in 1935, the life expectancy for
Social security, since instituted in 1935, has kept many elderly people from running below the poverty line (Hosansky). In 2015, the Social Security Administration predicted that the funds would be depleted by 2034 (Max). This poses a serious threat to the living situation of future generations when they retire. Our elderly, by today’s standards, enjoy a comfortable lifestyle. They are able to retire and still make over one thousand dollars a month. Some people also have private pensions which allow them to live even more comfortably. But with social security funds running out, we must ask the inevitable question. Is it worth having social security anymore? Social security should be kept. One must never fully rely on social security. In addition
Social Security has played a major role in supporting the elderly as well as sick and disabled financially for many years. However, we do not know how long this will last their are many problems facing social security and the funding of it with the population continuing to grow more and more people are taking advantage of social security. The main problem is people who do not really need the help and free income of social security abusing it making the government actually spend more than they actually putting into the social security fund. In this paper I will not only discuss the problems surrounding social security but also solutions in which could not only help better social security but also make it available for generations to come.
Lastly, many people depend on social security after retirement. Moreover, a lot of people who have retired depend on social security for more than half of their income. With that being said, reforms definitely need to be made in order to protect and better social security. In fact, in his article, “Why We Need Social Security” by Paul Starr, an award-winning writer, and professor, he states, “The elderly used to be an age group with an especially high rate of poverty. One of the signal achievements of Social Security, hardly noticed today, is that poverty has fallen dramatically among Americans over age 65 to just 10 percent, lower than the 12-percent rate for the population as a whole” (Starr). Social security plays a vital role in lowering the poverty rate and as Starr mentions, the poverty rate has dramatically decreased with social security. Therefore, keeping in mind the benefits of social security, the country should spend more time and money that will ultimately be used from taxes in bettering the system for future and current
Which is why Social Security is still in existence. The program is not exactly working as it is supposed to now. People working now have to ask themselves will there be any social security benefits when they retire. The answer fortunately for them is yes but it will be significantly less of a benefit their mother and grandfathers got. It's even possible that there will be no social security for me when I retire. The government is thinking about raising the age you can collect at since people are living longer.The system is now under financed. For right now it is working as intended but in 2033 it might
The government is investing more money than what it is able to produce causing the limitation on the amount that is given to the Social Security program. As the program expands as time progress, it needs, analyzes economic factors that might cause a shift in the imbalance of the funds. The United States is constantly shifting changes in the economy, for instance, the ratio of beneficiaries to employees it is causing a shortfall in the amount of money that is needed to provide the promised Social Security pension. As well as the life expectancy increasing that result in providing more money compared to previous generations that had a lower life expectancy. With the economy becoming weak by inflammation and other factors, Social Security realizes some impacts causing the shortage of money to provide to
It is an essential part to Americans all over the United States and this program was made for a reason and should still continue. If the social security benefits were cut, Americans would not longer survive financially. Social Security has been in effect for 75 years now, and has helped many retired workers and people with disabilities. It has been successful until recently when strategies predicted that the rate of payee is less than the rate of beneficiaries. Although, money will not come in fast enough to keep the program going, the solution is not to cut benefits or to shut it down. Social Security is beneficial for all, and some could not live without it. It’s basically a reward for the retired workers and the Americans that have worked hard and long for. The age to retire is 62, and that’s the earliest age. Although, you have no choice but to retire, you don’t necessarily have to retire at that exact age. Americans could work longer and collect more benefits. There are some strategies that has major economic potential. If the elderly worked longer, their earnings would gather and generate the payroll taxes. This would also help the social security’s troubled finances. Everyone looks forward to retiring from their job, but working longer has its rewards. Surveys showed that working longer would give them more time to learn about retirement and social security and will keep them on track into retiring. Older Americans look forward to starting a new job in their late ages and those who work longer are more likely to be happy and healthier than people who have already
According to Congressman Richard Gephardt, the social security was not meant to be the sole source of retirement income but rather as a foundation for retirement to give all working Americans a safety cushion. There will be money in the fund until 2029, so distressing baby boomers don’t have to worry. After that money is depleted the revenue from the payroll tax will be sufficient enough to pay 75% of every social security benefit for the subsequent 75 years. But how many burdens should be put on the young and middle age individuals, whose taxes basically pay for government retirement ...
It’s a matter of either losing all that you have worked for and live in poverty when retired or allowing your hard earned dollars to grow and have a secure comfortable retirement. I believe that Social Security is a doomed Government Program and that Privatization of Social Security would allow for a more secure retirement plan for all Americans. Social Security was first created to help aging Americans in their senior years so they would not end up in poverty. Social Security was signed in as law on August 14, 1935 by President Franklin D. Roosevelt and was fully operating by 1940 (SSA). Originally a retirement program, but Social Security now includes survivor benefits, disability benefits and Medicare and all together is the largest expenditure of the federal government (SSA). Evidence proves that today Social Security is not sustainable which is the reason that Social Security should be privatized, first, because it is currently unstable with a future outlook of becoming even more financially impossible. Next, privatization of Social Security will boost the economy, and finally, privatization will allow for a more comfortable retirement by putting more money in the pockets of the retirees and families.
The government program plan for social security was developed in the year 1935. It is one of the world’s largest government programs which has been paying out billions of dollars every year. But in the present era it has been facing some of the difficulties due to high taxation and unemployment. The social security system designed in 1935 does not match the 21st century. In the year 1935 it was basically created for women who wouldn’t work outside but in the present generation about 75% of the women are independent. If we look at the official records about 43 million people are getting the benefits of the social security program and many more number of people are earing to their retirement, the program will not change for the people born before
Social Security was created when Franklin D. Roosevelt signed the Social Security Act on August 14, 1935. The program provided a social insurance system based on the idea that if workers pooled a portion of their wages, they would be able to protect each other and their families against wage loss due to retirement, disability, or death and has become the foundation of economic security for millions of Americans. “Over the past 80 years, Social Security has become the largest single government program in the world, accounting for 26% of total US federal spending in 2014” (Privatizing Social Security - ProCon.org). Today, more than 47 million Americans receive checks from the Social Security system. Because of such high numbers, the security
Funding for social security becomes an important issue because the life expectancy has increased drastically since the initiation of social security. Individuals are able to retire at age sixty-five, the same age they begin receiving social security checks to provide them with the money needed to survive. The retirement age is now an issue because the program designed the age of retirement over twenty years ago which is significant because it is not designed for people to live much past eighty. Social security’s greatest obstacle is the shift in life expectancy because “most babies born in 1900 did not live past age 50, life expectancy at birth now exceeds 83 years” it is so difficult to accommodate and raise enough funds for individuals to