Social Security's 5 Biggest Problems (and 1 Silver Lining)
Social Security was controversial when originally proposed, with one point of opposition being that it would reduce the labor force, but supporters argued instead that retiring older workers would free up employment for young men, which during the Depression was a vital point of concern.
In total, the 2020 Trustees report estimates that Social Security is facing $16.8 trillion in unfunded obligations between 2035 and 2094, which is $2.9 trillion higher than in the previous year.
The reasons: The sudden collapse in payroll taxes, lower interest rates and lower inflation, they say. (On the other hand, the early death of some elderly, and lower cost of living adjustments, help the fund they add). ... Either Social Security payments will have to be cut, or taxes raised, or a bit of both.
One of the biggest problems facing Social Security is a demographic shift -- namely the retirement of baby boomers. Between 2010 and 2030 we're liable to see more than 70 million baby boomers enter retirement, which means a big surge in the number of eligible beneficiaries.
Social Security has a long-known basic math problem: more money will be going out than coming in. Roughly 10,000 baby boomers are retiring each day, with insufficient numbers of younger people entering the work force to pay into the system and support them. And life expectancy is increasing.
President Lyndon B. Johnson
| 1. | STATEMENT BY THE PRESIDENT UPON MAKING PUBLIC THE REPORT OF THE PRESIDENT'S COUNCIL ON AGING--FEBRUARY 9, 1964 |
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| 8. | LETTER TO THE NATION'S FIRST SOCIAL SECURITY BENEFICIARY INFORMING HER OF INCREASED BENEFITS--SEPTEMBER 6, 1965 |
In other words, the borrowing fund was required to make the loaning fund whole at the end of the process. This authority was used twice, once in November 1982 and once in December 1982. The total amount borrowed was $17.5 billion.
The original Social Security Act of 1935 set the minimum age for receiving full retirement benefits at 65. Congress cited improvements in the health of older people and increases in average life expectancy as primary reasons for increasing the normal retirement age.
A surviving spouse can collect 100 percent of the late spouse's benefit if the survivor has reached full retirement age, but the amount will be lower if the deceased spouse claimed benefits before he or she reached full retirement age.
If you are younger than full retirement age and earn more than the yearly earnings limit, we may reduce your benefit amount. If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2021, that limit is $18,960.
Social Security benefits provide partial replacement income for qualified retirees and disabled individuals, as well as for their spouses, children, and survivors. An individual must pay into the Social Security program during their working years and accrue 40 credits in order to qualify for benefits.
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