Essay on Is Social Security Broken

Submitted By Jaime-Barboza
Words: 1128
Pages: 5

Is Social Security Broken
Xxxxx xxxxxxx
Intermediate Macroeconomics
6 Oct 13

Is Social Security Broken The baby boomers are retiring more and more every day, and for them that is thanks to the Social Security they worked so hard for all their life to help with their retirement. Social Security has been a very popular program in the United States and it looks to be running long into the future, or will it? The purpose of the program was to give workers a type of retirement pension and was designed to collect after reaching the age of retirement. With its meager 1.2 percent interest it is definitely lacking in producing income when now a days there are bonds and investments in mutual funds that can produce more interest and provide a better retirement cushion. There is also the fear of whether the current generation will be able to collect it, I say why not because it is part of the checks we work for and is automatically withdrawn. So is social security running out? Should this program go through another reform? Social security was established as a piece of mind so that the average working person could look forward to one day stop working and enjoy some kind of retirement. Of course you had to be 65 years of age to be eligible for it, some people can collect it a few years earlier but people are living longer today than when this program came out. Right now, over the next decade it is estimated that the Social Security program will provide almost a trillion dollars in benefits, but this amount is what will exceed what is estimated to be funded by the payroll tax. The trustees are able to continue to pay full benefits right now because of their past planning and creating a surplus but this surplus is sue to run our in the next few decades and when this happens, Social security will suffer from underfunding. To fix this, there would need a few things to happen, first a 4% payroll tax increase would be needed, reduce benefits now to be able to provide for later, and or increase the retirement eligibility requirement for social security. With these issues for social security on the rise more and more people are pushing for reform to the program if there is any hope that it could keep up with inflation and life longevity. With the concerns of financing social security on the rise, the economy is growing weaker with smaller numbers of workforce supporting larger numbers of retirees. Social security is being depended on more every day because as the current working class grows right now, they are planning their current savings and retirement plans based off their potential Social Security check. Also more than 60 percent of Americans believe their social security is not going to be there when it is time for them to retire, and they are starting their own investments in 401(k)s, mutual funds, retirement accounts, and high risk investments in stocks. The way most people are handling their plans for retirement it sounds like it is time to reform social security but what must be done? Should we have to sacrifice more benefits so that everyone gets a piece of the pie, or should we increase taxes so that there is enough? Right now no one knows what kind of burden the social security dept. will really have on future generations and are currently un able to settle on a plan to reform it. The workforce today sees the social security as a tax now instead of a future benefit and wonder if not wish if they could just not pay that tax and be their own judge and jury of their future retirement. Then again we are an entitlement country and there are people out there that if they gave up their future social security checks by getting the option to not pay it and do it their own, then they would raise a flag when they retire about not getting such benefits. With people living longer and healthier lives, then why not extend the retirement age just a bit to help supplement some of the benefits. Most people dread…