The United States Retirement Income System

The Social Security system is perhaps the most successful government social insurance program in the nation 's history; and began with the Social Security Act in 1935. Social Security is a needed federal system that encourages income stability to millions of people across the United States. This is accomplished by giving a stable flow of income to replenish lost wages that occur as a result of disability, retirement, or death of a family member. There are about 59 million people in the U.S. that receive Social Security. Most of them are the required 65 years of age or older. Sadly about half of the 59 million people rely solely on Social Security to pay their bills and everyday necessities.

The passing of the Social Security Act generated a social insurance program that protected a multiplicity of people by supplying a monthly benefit to societal individuals age 65 and older who were no longer actively working; it was a means of income to individuals once they retired and was based on the person’s payroll tax contribution (Martin & Weaver, 2005). The longer amount of years a person was employed, the higher their benefit amount is set to be. Social weighing was a method they used to guarantee that the lower earning people receive a respectively greater income than their past earnings. (DeWitt, 2010). Not long after the Social Security Act was passed, legislation had considerable amounts of amendments to the original Social Security Act of 1935, and in 1939 the notion of economic security became family based; which it was then modified in order to supplement benefits to the spouse or young children of a retired worker, also providing welfare to a household who lost the loved one that was a covered worker (King & Cecil, 2006). In addition, the Social Security amendments of 1939 altered the benefits to be given to earlier participants and not focusing on giving benefits to future members in the Social Security program, also causing the arrangement of welfare to be provided to families rather than just an individual (DeWitt, 2007). Social Security being emphasized as an insurance rather than a savings, and carrying payroll tax money into the future would have

The Social Security Act of 1935 was an important milestone in United States history to protect the elderly and disabled. It was the first and largest social safety net created to aid the vulnerable. Current workers pay taxes in order to provide for those currently drawing benefits. This system works fine when things are in balance but runs into a shortfall when a larger portion of the population is drawing

14th August 2015 marked the 80th anniversary after President Franklin Roosevelt signed the Social Security Act in the year 1935. The program has been important in alleviating poverty amongst the elderly population. However, the system has started to how its age. The OASID (Social Security and Disability Insurance Trust Funds) is presently running on cash deficit as the baby boomers retire. The DI (Disability Insurance) program has been running on deficits for several uses and has been predicted to exhausts the trust fund. The social security provides important income security to millions of the beneficiaries but is on towards insolvency. Presently, the Social Security program pays more in benefits that it is collecting in revenue and has been projected that the trusts funds will run out in the year 2033 (Bernan Press, 204). At this instance, all the beneficiaries regardless of income and age will face an immediate twenty-three percent benefits cut. The longer term OASI would need more than a 4 percent point rise in the payroll tax so as to close the gap in funding over the next 75 years or benefits would have to be reduced below the promised 27 percent level by the year 2090 (Bernan Press, 2014). The focus of the paper is on the issue of solvency of social security fund

Many argue social security pay to beneficiaries will become depleted by the year 2037 due to the modest working class. Solvency can be defined by the availability of assets to be payed in full to beneficiaries (The Future Financial). The Social Security Administration is a department of the Federal Government. It is responsible for retirement, disability, and survivor’s benefits. Retirement, disability, and Survivor benefits come in the form of monthly payments to beneficiaries. Income is based upon how much taxes a working class American pays into the program. The Social Security board of Trustees report on the total assets generated by the American working class. In addition to the dwindling working class, the ‘baby boomers’ will be leaving

Americans today must to plan for retirement that spreads beyond social security. Many reports have shown that social security funds will run out in the year 2036. Social Security may not even be obtainable to Americans in the near future for many reasons. For example, budget constraints, a bad economy, declining assets, stocks, 401Ks, IRA's, and inflation are big reasons why. For the past few decades, many Americans thought that they could rely on Social Security for their retirement plans. When the Great Depression happened, President Roosevelt saw a lot of Individuals not working and witnessed many of the nation's elderly with no money to retire. The Social Security program was to make sure this level of poverty cannot happen again for any worker who had paid into the program. Payroll taxes are what fund this program. After a certain percent of a worker's paycheck is taken out, it will go directly into the fund that that provides benefits to current recipients. When law makers first implemented the Social Security program in 1935, they set it up to have the working person pay into a fund to help the aging Americans that are too old to work. For many years, this philosophy has worked well.

     There is much-heated debate on the issues of Social Security today. The Social Security system is the largest government program of income distribution in the United States. People are concerned that they won't see a dime of what they worked so hard to contribute into the Social Security system for so many years. Social Security provides benefits to about forty-three million Americans. Not only to retired workers, but also to their spouses and dependents of the workers who die prematurely. It also provides benefits to disabled workers and their dependents. Social Security appears to most people like a simple retirement saving’s account. After all, you generally

First and foremost, despite slight recent increases in the amount of income obtained by members of the older population, their economic status is still quite perilous (Federal Interagency Forum, 2012).1 Men in this category have a median income of $27,707, while women continue to lag behind with a median income of $15,362 (AOA & AOCL, 2012). A vast majority of these individuals cite Social Security as their primary source for this income, amounting to 86-percent of the total older population (AOA & AOCL,

Back in 1950, as the baby boom was just getting started, each retiree's benefit was divided among 16 workers. Taxes could be kept low. Today, that number has dropped to 3.3 workers per retiree, and by 2025, it will reach--and remain at--about two workers per retiree (Social Security Reform Center – Problem). The number of workers for each beneficiary dropped from 5.1 in 1960 to 3.3 in 2006. This is expected to decrease to 2.1 by 2030 (Klay & Steen). Baby boomers are going to retire and Social Security begins to spend more on paying benefits than it receives in taxes in 2017 or 2018 (Social Security Reform Center – Problem). This means Social Security will begin to handle very large funding problems because of the amount of people retiring and the worker/beneficiary ratio falling. This is caused by the increase of the payroll tax 17 times since 1935 (Epstein). Currently Social Security is not having any issues with payments. It lifts 1.3 million children and almost 13 million senior citizens out of poverty (Merino). The other side of the problem though is fairness. For example, you give someone $20 every month to save until the end of the year for you, but until then they can lend out that money and use it how they want until the end of the year. At the end of the year you might have your money or someone else’s money.

Social security is the government providing minimal financial support for individuals with little or no income. Social security can provide insurance, but around four out of five social security users are the elderly, or retired people. According to cpbb.org nearly ninety six percent of people ages 21-65 earned life insurance through social security. Social security also ensures that people will have retirement protection. This is for citizens sixty to ninety. (http://www.cbpp.org/research/social-security/policy-basics-top-ten-facts-about-social-security). For the elderly, social security is a way to get money, and for those with social security it is a major source of it too. According to the U.S. Social Security Administration, the social

Social Security as a whole has been a major part of The United States’ economy for a very long time. Though it is very important form of income to many people, specifically to older citizens, there are many people have opposing views over the branch of the welfare state. In some cases the social security system has been said to be more of a tool used to steal more money from working families. In other cases it is said to be the only reason that some people have not filed for bankruptcy.

The Social Security Act of 1935, with its later amendments, established a system of providing old age, survivor's, disability, and retirement benefits [EEOC, 2005], which the Social Security Administration administers. Furthermore, the act is to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue; and for other purposes (Social Security Administration, 1935). For 2005, social security is supported by a tax of 15.3 percent on income up to $90,000. If your net earnings exceed $90,000, you continue to pay only the Medicare portion of the Social Security tax, which is 2.9 percent, on the rest of your earnings (Social Security Administration, 2005). Employers pay 7.65 percent, the employee pays the other 7.65 percent, and if an individual is self-employed they pay both halves.

There is no doubt that the goal of the Social Security plan is noble. President Roosevelt said, upon it’s signing, “We can never insure…the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen…against the loss of a job and against poverty-ridden old age" (SSA.) However, the program is currently under uneasy footing. The main concern with Social Security is that, at the current rate, funding will deplete after the next eighteen years (Wharton.) Social security was established during a time when people had a shorter life expectation and as this life expectation extends new funds will be necessary to continue the

Social Security is what keeps many elderly and disabled Americans from being stricken by poverty. Without Social Security in our society 15.3 million elderly would have incomes below the poverty line, however after Social Security was added to the equation only 3.8 million elderly have incomes below poverty. Three-fourths of those elderly people who would have been poor without Social Security were removed from below the poverty line by Social

Planning for retirement should not be based on Social Security alone, but rather by saving portions of personal earned wages and putting finances into long-term investments. Depending on Social Security as the only income after retiring is an unsafe and undependable way to prepare for retirement. People who contribute to Social Security are mandatorily putting money into the Social Security Reserve; this money is used for older generations that will file for these benefits before the younger people working, in the early 21 century, ever receive a chance. Money controlled by other’s hands will never be a guarantee for a secure future, yet money saved by an individual to put toward personal goals will reward greatly. By taking the time to