Saving Social Security & Save Social Security

By: G. White

Social security and its future are one of the most controversial issues discussed in politics today, with many different views and outlooks taking center stage. The law that was designed by Franklin D. Roosevelt to protect the elderly and provide services and compensation to them in retirement finds itself in a completely different context today than it was seventy years ago.

Yet, change is nothing new-it is a daily occurrence that has affected social security before, and that will continue to affect social security in the future. Understanding both sides of the issue of social security is vital to ensuring a positive future for this country.

Briefings On The Beginning

The beginnings of social security can be traced back to the tragedy of the nineteen thirties-the Great Depression. It was passed as part of the New Deal, and was very controversial at the time because it was believed that it would lead to a loss of jobs. Yet, the program prevailed. Payroll taxes were first collected in 1937, and retirement benefits were paid that same year.

Changes Throughout The Years

The Social Security Act has proven to be a very flexible program, as it has been altered and changed several times over the years. This is not surprising when taking into consideration the dramatic changes that have occurred in the workforce since its original implementation. The act was expanded in 1939 to encompass farmers and to provide benefits to spouses. Medicare was added in the 1960s. More changes were made in the seventies and eighties. If it was changed in the past, what is stopping it from being changed to meet the needs of the future?

The Problem Of People

Currently, 163 million workers are earning Social Security protection, and Social Security provides benefits to about 50 million people. The future problems associated with Social Security revolve around changing demographics. While the average remaining life span of a 65 year old in 1935 was about 12 years, it is currently 18 years. This increase in average life span is one of the major factors contributing to the uncertainty of the future of Social Security.

Another factor is the retirement of the baby boomer's. The fifties and early sixties saw a huge increase in reproduction, and it is these offspring who will be retiring beginning in the next several years. At the same time that Social Security will need to accommodate more retirees, the amount of people paying taxes on Social Security will decrease from 3.3 people per retiree today to 2.1 people per retiree in 2032. It is the combination of these problems that is causing the panic regarding Social Security's future.

Solving The Problem

There are many solutions being discussed regarding the Social Security program, and each of them would mean a trade off for Americans. Two of the solutions are somewhat obvious: increase the payroll tax, and decrease the amount of services provided to beneficiaries. These solutions would have obvious ramifications, and might only cause more problems for the future of Social Security than they would solve.

Another possible solution is to allow for early investment in Social Security in the form of a "pre funding" voluntary Social Security savings account. Although workers are currently unable to contribute to their Social Security funds before they retire, this proposal would allow them to do so. Critics say this plan would be expensive to manage, and it would be risky for beneficiaries as well.

A Middle Ground

Just as with any important issue, it would be nearly impossible to find a solution that would please everyone. Yet, the past of Social Security gives some hope for its future. If Social Security was fluid enough to be changed in the past, then we can have faith that it will be strong enough to handle any future changes.

Money Management
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