The United States Retirement Income System

During the depression, approximately 50% of senior citizens lived in poverty. Like many Americans appalled at the sight of fellow citizens living their final years in poverty after a lifetime of hard work, FDR believed that a nation as prosperous and advanced as the U.S. should not allow retired citizens to suffer poverty. It protects citizens from poverty during retirement, and provides temporary relief for involuntary unemployed Americans and families seeking new jobs- a program known as Unemployment Insurance. The funds for Social Security are collected from every paycheck-worker and employers split the tax contributions that the government collects. After age 62, citizens receive a monthly pension check back from the government.

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

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

Roosevelt and his Economic Crisis Committee, in 1935, came up with the simple idea of providing benefits to the generation of retired workers from tax money of currently working generation. Roosevelt put this straightforward idea into the system to make it work, and it surprisingly has worked out well so far. When the bill became a law in 1935, there were many people who were affected by the Great Depression and sought financial aid. Unlike the bank money that goes in loans and still depositor have access to the money; Social Security System passes out collected money immediately into benefits (“Social Security System”). This way, the working generation will always provide enough money to the fund. Rather than providing money from government fund, idea of benefiting citizens from their own money didn’t receive

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.

Historically, Social Security trust fund has taken in more money in taxes than it has paid out in benefits. However, from last few decades the worker to beneficiary ratio has been dropping. In 1945 there were 42 workers for each beneficiary, in 1980 it had fallen to 3.2 worker to one beneficiary, expert predicts by 2030 there will be only 2 workers will support each beneficiary. The reason for this change is that the beneficiary are living longer, so they are receiving Social Security Benefits for longer periods of time. While on the other hand, population growth is lower, that means fewer babies per family, and less workers force for later. The less workers per beneficiary will

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.

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,

Social security in the United States is a federal system run by the Social Security Administration to provide monetary benefits, or welfare, to citizens who are retired, unemployed, or disabled. In 1935, President Franklin D. Roosevelt enacted the Social Security Act which limited the dangers of old age, unemployment, disability, and families with dependent children within the United States during the great depression. In order to obtain the funds paid out to current social security recipients payroll taxes called Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA) taxes are collected from the earnings of current workers.1 FICA and SECA

     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

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.

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

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

With the workforce in America decreasing due to hard economic times, there is no guarantee the money put into the reserve will sufficiently support a generation when it is time for retirement. Depending on Social Security to support a person financially when ready to retire, will leave that individual in even more of a struggle than the beneficiaries trying to survive in these earlier years of the 21 century. Social Security benefits represent about 41% of the income of the elderly; if there is not enough to support even half of the elderly’s financial needs now, there is no reason a younger person should depend on it alone for retirement (Dewitt, 2010) in the future.