Changing in US Demographics
The shifting in demographics is a major force behind the financial challenges facing Social Security. Back to 1960, the workforce was a lot larger compared to the numbers of retirees, with 5.2 workers supporting each Social Security beneficiary. With such a sustainable system, the taxes were comfortably paid by the working population, and it was easy to provide for retirees. However, with the population aging and birth rates declining, this ratio dramatically dropped. 2023 came with only 2.8 workers for every person who receives Social Security, and it’s projected to fall further to 2.2 workers per beneficiary by 2034.
This demographic shift comes with a significant challenge, and fewer workers are paying into the system. More people are living longer, and they draw benefits for extended periods. The longer life expectancy means that the financial burden covers more and more age sectors in retirees, and it’s harder to maintain the Social Security system without the right decisions, even if some may seem tough and often unpopular.
This difficulty in implementing major reforms is mostly influenced by political hesitancy. The last time Social Security faced a crisis was in 1983, and Congress has avoided substantial changes to the system since then, mainly because of the political risk involved. As time goes on, it starts to be more difficult to reform the system without profoundly affecting millions of Americans.
Eventually, there is going to be no choice for the Congress but to act. They are likely to do so in a way to avoid upsetting the older voters, and that is a powerful demographic sector. Cutting benefits for those near or already in retirement is unlikely, and instead, any changes might target the younger generations or higher-income individuals.
Possible scenarios:
They might increase payroll taxes on wages above the current income of $168,600. Any income above this line is not subject to Social Security payroll taxes. Eliminating or raising this cap could bring some revenue to shore up the trust fund.
Gradual reductions in future benefits—for the younger generations and higher-earning workers. This means that for those nearing or in retirement, the benefits will stay intact, but the future payouts for younger workers with higher incomes will be reduced.
These changes could manage the shortfall, but there is still careful navigation needed, considering political and public opinions where any adjustments to Social Security are viewed with intense scrutiny.
8 Responses
By only paying Americans, and watching benefits closely. Slow down hiring and requested funds from the agency.
Sometimes it seems politicians aren’t very smart. They are very good at raising taxes, and cutting money from programs.
If the wasteful government spending were cut, both social security and medicare would be solvent.
The problem I have is that we paid into social security, but illegal immigrants that are coming in are getting treated better.
We worked hard for many years , and when we retire we are entitled to file for social security. Illegal immigrants have done nothing, but create a big burden on the government, and taxpayers.
Close the border , cut all funding , and benefits for illegal immigrants. There is plenty of money being wasted . Stop all the funding for policies like “The Green New Deal”, and many others’.
It is pretty easy to figure out how to put money back into social security , and medicare. It sure seems like it is easy to take money from it.
The American people are sick and tired of having to pay more taxes, and illegal immigrants being treated better than us.
You said it perfectly Eric!! I started working when I was 16 and I will turn 73 in November.
Prices are higher than ever. Only people who paid into SS & Medicare should be eligible.
You are 100% correct. It isn’t a solvency problem; it’s an inappropriate spending problem. Politicians need to learn how to manage a budget. They also need to be reminded that it’s OUR money, not theirs.
I agree with Eric. I worked all my life, paying into Social security. Quit giving it away to illegals!! I deserve my benefits as well as others who have earned it!
Stop paying as to immigrants that never paid into the system.
Here is how you keep Medicare and Social Security solvent, first remove all of those other programs that don’t pay into Social Security and Medicare. Next require all of our politicians to surrender their political war chests after each election. Politicians raise hundreds of millions of dollars instead of letting them keep the money, make them put the money into into Medicare and Social Security. If they decide to run for office again they can always raise more money.
I agree with Eric Swan, there is no justification as to where WE the american people who through all there lives looked forward to retireing and relaxing once done so. Now because of there unjust ways of paying bills the government has to look for other ways because of the mishandlng of taxes paid in through the hard working people all of there lives and end up getting less because of illegal immigrants coming here and being treated more better than the ones that are funding there scheeming ways. Do not throw out benifits to illegals, shut down the boarder except for those who come here legally, and start to move these vagrants back to there own country who paid for alot of them to come here to ease there own financial burden. Its very simple, over and done with.