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Will Social Security Be Around for Millennials? - YouTube
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from the very first time I learned about
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the existence of social security one
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thing was made abundantly clear social
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security is that's right Social
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Security's doomed status has been the
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fodder of news anchors and cable pundits
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for so long that many people don't even
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question it as a result many young
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Americans are starting to worry whether
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we'll ever see a dime of the taxes that
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will be intuitive and this fear isn't
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unique to America there are billions of
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people that are paying into similar
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programs all over the world from Albania
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to Sim Bob way and when people's future
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income is messed with bad things can
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happen
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remember the riots in Greece a few years
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ago so is social security and income
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source we should count on a retirement
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or should we just kiss those dollars
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goodbye and hope our grandparents enjoy
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it while they can the earliest recorded
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beneficiary of the Social Security
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retirement benefit was a mr. Ernest
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Ackerman a retired motormen from Ohio
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Ernest applied for a one-time lump-sum
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benefit of 17 cents the day after Social
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Security program began considering he
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only paid five cents into the system
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during that single day I say he made out
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alright in the decades since the program
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has expanded to touch more Americans
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lives than any other government program
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with 169 million people paying in and 61
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million receiving Bennett
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instead of the lump sum payment Ernest
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and his peers received the program
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promises retirees an income as long as
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they live
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presuming they paid in long enough in
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2019 the average Social Security
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retirement benefit is one thousand four
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hundred sixty one dollars per month the
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maximum benefit you can collect is two
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thousand eight hundred sixty one dollars
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a month and in order to receive any
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credit you're required to earn at least
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one thousand three hundred sixty dollars
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per quarter for forty quarters
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aka ten years with so many lives and
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dollars on the line it's no wonder that
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people tend to panic when they hear
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reports that the Social Security trust
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fund is set to run out of money
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according to the trustees report funds
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for retirement benefits are currently
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set to be depleted in the Year 2034 so
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was your uncle Jim right all along when
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he blamed that president he doesn't like
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for stealing the funds from our
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retirement are we all gonna end up
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eating cat food in our golden years that
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is highly unlikely for starters Social
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Security was designed to be a
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pay-as-you-go system that means current
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workers tax payments go to pay current
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retirees this is different than
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something like a corporate pension
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company pensions go into a big
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investment pool and need to be funded in
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advance just in case the company later
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goes out of business but in 1984
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President Reagan made some big changes
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that resulted in the program bringing in
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more money than it paid out and this
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excess stock piled into what became
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known as the Social Security trust fund
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one of the most popular myths
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surrounding Social Security is the
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belief that somebody Congress George
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Bush Barack Obama raided the coffers of
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this fund this is a false statement the
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nearly three trillion dollar surplus
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that the trust fund accumulated over the
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past three decades hasn't been stolen
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rated or pilfered it's been invested
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rather than earns zero percent interest
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on your retirement savings the trustees
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decided to invest in special base unit
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bonds from the Treasury which earn an
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average interest of two
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percent per year bonds are technically a
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form of borrowing but it's a long way
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from the federal government pillaging
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your retirement so why are so many
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people worried about the future of
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Social Security well Americans are
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living longer and having fewer children
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right now 14% of the population is over
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65 by the year 2080 that number will
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grow to 23% that means more people
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drawing from the system and fewer people
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paying in the year 2018 was the first
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time in 34 years that the program
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actually paid out more than it took in
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that can only go on for so long the
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trustees currently predict the fund to
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be completely empty by 2034 so what
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happens if nothing changes by then is it
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back to cat food thankfully the whole
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system doesn't crumble once the trust
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fund runs out of money that's because
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the system is still primarily
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pay-as-you-go and current taxes will be
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able to take care of most of the
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benefits retirees would continue to get
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benefits but they would have to be
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reduced taxes from those future workers
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will only use recover 79 percent of
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retirees benefits when the money runs
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dry while that's not awesome it's nice
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to know that if we don't make any
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changes you can still count on the check
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it'll just be twenty to twenty-five
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percent reduced by the time you retire
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the good news is that we still have 15
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years to create a solution to rising
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life expectancies and lower birth rates
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there are several possible paths to
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fixing the shortfall the simplest and
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inevitable outcome if we don't find a
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better way is to reduce benefits to
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match income from payroll taxes simple
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yes but most folks don't want their
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retirement just after a lifetime of
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paying into the system a second option
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would be to simply increase what
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taxpayers pay into the system the
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current Social Security tax is twelve
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point four percent half of which is paid
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by you and half by your employer and
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income above one hundred and twenty
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thousand nine hundred dollars is not
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taxed for Social Security at all
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lawmakers could increase the percentage
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paid in or raise the limit where Social
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Security
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stays out surprisingly voters seem open
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to doing this 77% of people say raising
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taxes is worth it in order to preserve
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Social Security for future generations
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cutting entitlements and raising taxes
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tends to make your average lawmaker
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sweat a little bit so another solution
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that avoids both would be to raise the
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age of retirement for younger workers
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the full retirement age was originally
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62 when the program began and has since
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been raised to 67 for anyone born after
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1960 we're living longer so it might
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make sense for retirement checks to
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begin later we could also reduce or
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eliminate the benefit for wealthy
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Americans or we could simply abolish the
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whole government program and privatize
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retirement plans making workers
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completely responsible for their own
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retirement but considering the
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frightening Leeloo savings rate of
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Americans seems like a stretch 8 in 10
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Americans believe that Social Security
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is good for the country and nearly 9 in
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10 say it's now more important than ever
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it affects more people than any other
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federal program and has one of the
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highest favorability ratings it's nice
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to know that even if lawmakers can't
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agree on any of these solutions we can
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still rely on and that's our two cents
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thanks to our patrons for keeping two
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cents financially healthy click the link
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in the description if you would like to
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support us on patreon what would you
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like to see lawmakers do to our Social
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Security program let us know in the
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comments whoa
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you
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