FinLitTV® - The Social Security Problem

Social Security, the government safety net that pays all older Americans a monthly stipend to live in retirement is headed for depletion. In fact, three fourths of younger Americans ages 18-34 do not expect to collect Social Security when they retire. What happened? After World War II, a boom of babies, generally referred to as the "Baby Boom" were born and these people are now starting to retire. In fact, each day many hundreds of thousands of Boomers retire. The Social Security system is set up so that the current workers pay for the Social Security benefits of those in retirement. The problem is that there are not enough current workers to pay for the benefits of the retired workers. The solution? Plans being considered are to either reduce the amount of Social Security benefits as in the amount of money that is paid each month, to make it based on need so that well-off Americans may not receive Social Security at all, raising the taxes workers pay into the Social Security system or privatizing the Social Security management so individuals would be able to manage their own Social Security investments. So far, these are all possibilities and there has been no decision made yet about how the future generations will be able to rely on Social Security. For now, the Social Security Trust Funds are available to pay benefits. It's the future that will need to be addressed if the working generation is to have Social Security when they retire.

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• The Social Security Problem
• Social Security Trust Funds