Social Security Is in Financial Trouble
- In 1940:
- Two percent of each worker’s paycheck was collected.
- About 159 workers per each retiree.
- Fewer than three workers per retiree.
- 12.4 percent payroll tax is levied on workers’ paychecks.
- Social Security is the largest tax most workers’ pay, and it still falls short.
If No Changes Are Made
- Due to budget shortfall, all benefits will be reduced by about 25 percent in 2034.
- Young workers could face tax increases: Current benefits come from today’s workers. Future benefits must be funded by future taxpayers.
- Less federal money to spend on other priorities, from the environment to national security.
Policymakers Can Create a Better, Fairer System
- Oﬀer more flexibility: Provide earned family leave for new parents.
- Implement reforms: Consider adjustments in the retirement age.
- Encourage work and savings: Make it easier for companies to help all workers better save for retirement.
- Ensure the program fulfills its mission: SocialSecurity was created to protect “against poverty-ridden old age.”
Policymakers have the opportunity—and the responsibility—to create a legacy of a better economy and greater retirement security by modernizing Social Security. Read more here.