By Nancy Verdin, MSW
Similar to an aging house that requires periodic renovations to stay liveable, Social Security requires significant updates to serve its purpose effectively. While it provides crucial income support to older adults, individuals with disabilities, and survivors of deceased workers, there are repairs needed to address the long standing program. Established in 1935, Social Security has served as a vital safety net, providing essential income for countless Americans. However, given the significant changes in our world since its inception, it’s imperative to pivot and enhance strategies in making the program sustainable for future generations.
While Social Security is crucial for the current 52 million recipients, failing to look at its sustainability could lead to fund depletion. There are several variables that contribute to the depletion of social security and according to the Social Security and Medicare trustees report, by 2035, funds may fall short, resulting in only 83% of expected benefits being payable to recipients.
Factors contributing to the Shifting Tides of Social Security
It’s not solely one factor that leads to the decline in funds, but rather a multitude of factors, including:
- Demographic Changes: As the “Baby Boomer” generation approaches retirement age combined with historically low birth rates, there is concern that the number of working taxpayers contributing may not keep pace with the needs of the program.
- Changing Worker-to-Beneficiary Ratio: The ratio of workers to beneficiaries is falling. In the past, there were more workers supporting each beneficiary, but now that ratio is shrinking, creating funding challenges.
- Contribution Disparities: There is an ongoing debate about whether high earners are paying their fair share into the system. The cap on taxable income for Social Security means that income above a certain threshold is not taxed, leading to potential funding gaps.
What can be done? The Social Security Administration suggest several measure that will require bipartisan support, including:
- Increase normal retirement age
- Raise taxes on the highest earners
- Increase the Old-Age, Survivors, and Disability Insurance (OASDI) payroll tax rate
While finding a sustainable solution for the depletion of funds remains a pressing national challenge, one fact remains indisputable: this issue will impact us all. Social Security is not just an individual interest, but reminds us of our interconnectedness and collective responsibility. Each of us plays a role in enhancing each other’s well-being and reminding us to continue the legacy in the purpose of Social Security which is to provide aid to our most vulnerable populations, knowing full well that one day, it may be us or our loved ones in need of such support.