Social Security won’t be here in 17 years according to its Board of Trustees, and that could be a problem for every generation after the Baby Boomers. Our generation is currently getting stuck with the bill for paying for the older generations Social Security, and we won’t enjoy the same benefits when it’s our turn to retire.
When Social Security was introduced in 1935, the average life expectancy was 60 for men and 64 for women, but you didn’t receive your first check until you were 65. Therefore, most people didn’t live long enough to secure their first check, or they lived long enough but didn’t receive the check for very long. Newsflash: in 2015 the life expectancy was 79.
This means is that most people are collecting their checks for 10 to 30 years. With the current system set in place, by 2040 the amount of benefits paid to those who receive benefits will be 40% more than the money that’s coming in. Therefore, as mentioned early, the Board of Trustees has said that they just can’t keep up and they’ll go bankrupt.
When this program was originally introduced, the number of workers in comparison to retirees was 159 to 1. Today, the ratio is more dramatic with three workers supplying every retiree with their monthly check. Because of the longer lifespan, there just aren’t enough workers to spread the wealth evenly to support these retirees relying on Social Security. Therefore, the Social Security’s Board of Trustees has had to dip into a trust fund to keep it running.
But how can we fix the problem? I’m glad you asked. There are two options when facing the challenge of Social Security: either lower the benefits granted to those receiving benefits or raise the taxes of everyone else. Personally, I’m not a big fan of either of those options; if we can’t raise the age at which someone begins to receive benefits because everyone has centered their lives around the fact that they receive the benefits at a certain age, we need to protect ourselves.
As a millennial, retirement is the last thing on my mind. However, it’s something that is being brought to my attention, and I encourage other people of my generation to take notice. We can’t rely on the government to provide us with a comfortable retirement, so we need to ensure it for ourselves.