The current social security system is not going to last forever; the social security system is projected to run out of money by 2034. As of right now the social security system operates by the currently employed population paying into it so that the current retired population will have a source of income. But with the major population shift that has happened in recent years there is not enough people working right now to put money into the social security system. Which is why social security should be privatized.
As stated before the current social security system is going to run out of money in the next 20 years. When that happens a lot of people are not going to have any source of income. Since 2010 the social security system has paid out
…show more content…
The year over year growth rate for private accounts is 11.53%, whereas for social security it is a growth rate of 2.67%-3.95% (3). Private retirement plans would also allow for inheritance. In the current system funds are non-transferable. The check that you get in the mail is yours, but once you die; if you were giving your children some money each month to pay for school, rent, groceries etc. that income for them is gone. The current system is unfair because those that live shorter lives will collect less of their earned benefits (2). In a private system the money in someone’s retirement account can be an inheritance. The government does not see it as that money helping your family out for school and rent; rather they see it as money going back into the system, and if there’s a surplus that money would leave social security entirely (3). Also with the privatization of social security individuals would be in charge of their own retirement decisions. They would not be dependent on social security, and they would also not be dependent on the checks that social security dishes out each month. Instead, they can go into their own accounts whenever, and take out however much or little that they …show more content…
Since everyone receiving social security are receiving the same amount each month there is no discrimination based on gender, race, class etc. However, the current system is very mathematical and relies on statistics to generate the amount of money for each social security check. Groups of people with shorter life expectancies such as: African Americans and the poor, are written out of the system almost entirely. Their social security taxes are transferred to the groups of people with longer life expectancies (1). One group of people living longer than the projected life expectancy upset that entire system. Having a private account in which people can put however much they desire into an account that can be handed over to a spouse and children is more
To understand how privatizing social security will help the social security program in the future, first it is important to know what it is and what it does. How social security works now is that everybody that gets benefits from the social security program all get them from one big pot, so to speak. By privatizing the different accounts, they can earn interest faster and make more money for the consumer on an individual basis. This can work better to because the accounts are individualized and earn the right amount of money for the different financial situation that the person is in. This will be a big change for the way that social security is run, but it is for the better and it will help lots of older Americans and the social security program in general for years to come.
Throughout the 20th century governmental responsibility has made remarkable progress. One major milestone of the widening of the responsibility of the federal government was it’s making an obligation to care for the elderly and retired in the form of social security. In 1935, the Social Security Act was enacted by the federal government to provide financial security to the elderly, retired citizens in America. Although the federal government first took on this responsibility in 1935, it is still affecting our lives today. However, social security would not have advanced this far without many organizations and individual reformers to begin and improve social security throughout history.
The original intention for creating social security was to act as a safety net for retirees, but as time past, there seems to be a great deal of economic issues relating to the program. Social security was created to help benefit retired workers, spouse and children of deceased workers, as well as workers who have become disabled before retirement. This insurance program provides retirees with a steady income once they retire. President Roosevelt signed the program into law on August 14,1935. Since then, social security has been beneficial for many workers and retirees. In fact, social security has become the main source of income for many retirees.
When we hear about social security we think of that number every adult and college teen should memorize as they venture on the real world. We don’t think any more of it and most people don’t know about the benefits of such a number and having one. Some migrants from other countries dream of being in America and having a social security so that they may reap the benefits of having such a number and becoming a US citizen, while most every day people just assume it’s a number. What social security is would be a program created back in 1935 and it was used to provide old age, disability, and survivors insurance and on top of that, a supplemental security income which is a income for the elderly and/or disabled people of these United States. Now lets say we privatize all that and therefore do what we did with healthcare, of course their will be good outcomes of doing such a move but where this is good, there will always be bad no matter how good something turns out to be. The stock market, pride, government, all of these are several factors that can be towards privatization of social security but also can be bad things about it as well. Without the government we lose order, with the government we have less freedom, with the stock market people could win, without the stock market (when it crashes) people lose, yin and yang, pro and con one cannot exist with out the other.
Social Security is a system that was set up in 1935 after the Great depression to help people get through tough times. "Social Security is now used by nearly 44 million Americans"(policy.com). Only people who payed into social security are eligible to collect when they retire. Many people think that they receive the money they pay in but that is not total true. The money that you pay in is used for the people that are receiving it now. "In 1950 there were 16 workers for every beneficiary; today there are only three workers per beneficiary"(policy.com). There is more money going into social security then coming out now. The extra money goes into a trust to be used when it is needed. By the year 2032 those numbers are going to drop. By this time most baby boomers will be retired and collecting social security. This will put a big strain on the funds. There will be more money going out then coming in. And it will not take long to use all the money that is in the trust. By the year 2034 they will only be able to pay 75 percent of the beneficiaries. "The projected average monthly Social Security benefit in 2032 of about 1,100 (in 1998 dollars) would fall to about $800, and would drop further in later years. Average benefits for low-wage earners would drop from $670 to $480"(www.ssab). Theses cut would effect the people just starting to receive benefits and those who are already receiving benefits. And with each year these benefits will decrease. As these benefits continue to decrease "the percentage of aged people living in poverty would rise"(www.ssab).Most people believe this is happening because of the baby boomers generation. There will be more people taking from social security then giving in. By the time my generation is eliable to receive social security there may not be any money to give.
Today, the future of Social Security is in the news again. The reason Social Security is of such concern is that the extremely large group of citizens born in the post-World War II period—the much-discussed baby-boom generation—is retiring. The generation that will take its place in the workforce is far smaller in proportion to the number of retirees, raising fears about the sustainability of Social Security. In the past, proposed solutions to the various problems facing Social Security aroused great debate. Each time, however, the arguments were stilled, repairs were made, and the system continued to fulfill its mandate. That uncertainty about the future has resulted in suggestions for change that range from minor adjustments to complete privatization of the ...
"Social Security Should Be Run by the Government" by Institute for America's Future.Capitalism. Noël Merino, Ed. Current Controversies Series. Greenhaven Press, 2010. Institute for America's Future, The Perils of Privatization: Social Security Privatization Cuts Lifetime Benefits; Makes Senior Citizens Vulnerable to Poverty: The Impact in the United States. Washington, D.C.: Institute for America's Future, 2008. Reproduced by permission. .
The Social Security Act of 1935 was established in order to help Americans receive benefits when they retire or in the event that they are not able to work anymore. All Americans who work pay taxes, which in turn are put into the Social Security system. When this act was passed, it was meant to supplement a person's income, when reaching the age of retirement. This money would add to their pensions or savings. Many retirees now depend on it as their only source of income. In the past, the majority of jobs had pensions and the employee contributed to it. In modern society, pensions are no longer the norm in jobs as they were 50 years ago. Blue collar jobs are more than likely to not have any sort of pension plan as opposed to white collar jobs. Not all people receive the same amount of money when they retire. Depending on the salary you earned when working, that will determine how much you will receive in your monthly Social Security check. A person who has worked at low paying jobs in their lifetime will barely receive enough in Social Security. Many of our elderly in the United States barely receive enough money that many elderly live below or just barely above the poverty level.
The damage caused by tax increases rises more than proportionally as tax rates rise. The initial Social Security tax in 1937 was 2 percent on the first $3,000 of wages for a maximum tax of $60, which is equal to about $1,000 today. Thus, even after adjusting for inflation, today 's maximum tax is about 14 times larger than it was originally. When considering Social Security 's unsustainable finances, there are a few basic ways of tackling the problem. In 2013, the tax is 12.4 percent and the cap is $113,700, for a maximum tax of about $14,000. More than two dozen countries have moved to retirement systems based on personal accounts. Personal accounts have long been discussed as a superior alternative to the current pay-as-you-go Social Security system. Personal accounts would also encourage greater work effort and thus boost economic growth. Tax increases are not the answer to solve America 's problem of overpromised elderly entitlement programs. The first option has been used repeatedly over the last eight decades to temporarily prop up the program. The combined effect of such huge tax increases would dramatically shrink wage and income tax bases, perhaps prompting policymakers to raise tax rates even higher. Since tens of millions of middle- and higher-income workers already face high marginal tax rates on their wages, future increases in payroll taxes would be
Social security, since instituted in 1935, has kept many elderly people from running below the poverty line (Hosansky). In 2015, the Social Security Administration predicted that the funds would be depleted by 2034 (Max). This poses a serious threat to the living situation of future generations when they retire. Our elderly, by today’s standards, enjoy a comfortable lifestyle. They are able to retire and still make over one thousand dollars a month. Some people also have private pensions which allow them to live even more comfortably. But with social security funds running out, we must ask the inevitable question. Is it worth having social security anymore? Social security should be kept. One must never fully rely on social security. In addition
It should not be forgotten that about 17% of the population receiving payment from social security is not yet retired. Additionally, over 12% of the beneficiaries are spouses and children of either retired, disabled or deceased workers (ProCon.Org 04). Privatizing social security will mean that the money used to pay more the insurance cover will be directed to individual accounts while the taxes on social security will be lost. Simple calculations suggest that loss of such funding translates to loss of income for more than 37% of the population who yet to retire. The disabled together with their kin will lose what is probably the only source of
For more than 75 years, social security has been designed to ensure retired workers that there will be money when it comes time to retire. Since 1935, social security has been the main foundation of economic security for Americans. Social security has developed a steady income for retired workers and helps the disabled worker make a decent living as well. The money made by the worker is divided into payments to help provide for them and their family. There are a few suggestions that should be taken into consideration in order to help fix social security problems. The raising old taxes that finance social security, and raising the retirement age, and only providing social security to ones who earn less than a certain amount of income are some
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 contribute through payroll deductions, then get money back after you retire. Nonetheless, Social Security is a complex and intricate communal program. By design, Social Security involves massive subsidies from the next generation of retirees to the present, from single workers to married couples. Now that the gigantic post World War II baby boomers generation approaches retirement age, there is concern about the consequences it will have on Social Security. There are basically three options, we can do nothing and allow Social Security to run it’s course, revise Social Security, or consider privatization of the system.
It’s a matter of either losing all that you have worked for and live in poverty when retired or allowing your hard earned dollars to grow and have a secure comfortable retirement. I believe that Social Security is a doomed Government Program and that Privatization of Social Security would allow for a more secure retirement plan for all Americans. Social Security was first created to help aging Americans in their senior years so they would not end up in poverty. Social Security was signed in as law on August 14, 1935 by President Franklin D. Roosevelt and was fully operating by 1940 (SSA). Originally a retirement program, but Social Security now includes survivor benefits, disability benefits and Medicare and all together is the largest expenditure of the federal government (SSA). Evidence proves that today Social Security is not sustainable which is the reason that Social Security should be privatized, first, because it is currently unstable with a future outlook of becoming even more financially impossible. Next, privatization of Social Security will boost the economy, and finally, privatization will allow for a more comfortable retirement by putting more money in the pockets of the retirees and families.
The social security funds are rapidly decreasing due to many reasons. The reason our social security funds are being depleted is that there has been rise in