Social Security is our country’s largest, most expensive federal program. It was created in 1935 by President Franklin D. Roosevelt
to protect “against poverty-ridden old age.” Social Security was meant to take a small share of workers’ wages to pay those who have reached retirement age.

Today, Social Security requires one out of every eight dollars earned by the average worker and still falls short of its mission, as about
10 percent of Americans over age 65 still live in poverty. These high payroll taxes make it diffcult for workers to save for retirement or other needs. Worse, Social Security’s costs already outstrip payroll taxes, and costs will continue to climb, creating additional burdens
on taxpayers and the federal budget. If nothing is done, by 2034, payroll taxes will only cover about three-quarters of promised benefits, resulting in a significant loss of income for all Social Security beneficiaries.

In January 2018, IWF published a policy focus written by Kristin Shapiro outlining how Social Security could be modernized to provide earned family leave for new parents, enabling people to decide when they need benefit support most and without increasing overall costs. This would be an important step in making Social Security more responsive to people’s needs.

However, policymakers also need to reform Social Security to make it financially sustainable, encourage work and savings, offer more flexibility, and ensure that it fulfills its mission of preventing poverty in old age.