What the Future Holds for Social Security

As the ‘Baby Boom’ generation begins to entire retirement era, the future for Social Security appears bleak. With a smaller generation being called upon to fund Social Security for one of the largest generations the country has seen, it appears that the current generation of college-aged students about to enter the work force may never see a penny of what they paid into Social Security over the years. As the average life-expectancy of Americans continues to climb, so too do the number of benefits that have to be paid each year. This does not mean that Social Security is a lost cause, or that future generations will be left with no money when they retire. It simply means that action needs to be taken, both at a national and individual level. With options such as Individual Retirement Accounts (IRA) and the increasingly popular 401(k) plan, there are other options for those who worry Social Security will not be available to them in the future to consider. In addition, there are several approaches that the United States government could consider pursuing to ensure that Social Security thrives. This includes, but is not limited to, reductions in benefits, increases in payroll taxes or an economic investment by the United States government.

Social Security is a program that includes many different services but is commonly known for a tax that is deducted from paychecks by the government, along with income taxes at the federal, state and local level. The idea behind Social Security is that by having money deducted now, it will be feeding into a system that will then provide monthly payments for individuals once they retire. While this system has been successful to date, the impending retirement of the ‘Baby Boom’ generation, along with other economic factors, have put Social Security in a position to become defunct before the current generation that is entering the workforce is eligible to receive those benefits.

The Social Security Administration stated in their 2008 Annual Report to Congress that “the projected point at which tax revenues will fall below program costs comes in 2017…