I Want My Money Back: The Problem with Social Security

The depressing deterioration of America’s famous – or infamous – retirement aid program

In this Feb. 11, 2005, file photo rolls of blank social security checks run through printers and are processed at the U.S. Treasurys Financial Management services facility in Philadelphia. Social Security recipients shouldnt expect a big increase in monthly benefits come January. Preliminary figures show the annual benefit boost will be between 1 percent and 2 percent, which would be among the lowest since automatic adjustments were adopted in 1975. (AP Photo/Bradley C Bower, file)

ASSOCIATED PRESS

In this Feb. 11, 2005, file photo rolls of blank social security checks run through printers and are processed at the U.S. Treasury’s Financial Management services facility in Philadelphia. Social Security recipients shouldn’t expect a big increase in monthly benefits come January. Preliminary figures show the annual benefit boost will be between 1 percent and 2 percent, which would be among the lowest since automatic adjustments were adopted in 1975. (AP Photo/Bradley C Bower, file)

Kelly Harrington, Staff Writer

Social Security. It’s impossible to avoid those two words which result in a substantial deduction out of all Americans’ paychecks. When it was first created in the 1930s, it made perfect sense and served America well for many years after its genesis. However, as a contributor to the program today, I worry about its future as its once solid infrastructure begins to unravel. Those who are currently cashing in on the program still receive significant benefits, but it worries me that I could possibly have little to no access to these benefits when I become of age.

The Social Security Act was signed Franklin Delano Roosevelt on August 14th, 1935. The initial program only paid benefits to the primary worker, though it was also more of an umbrella term for a range of programs, including unemployment compensation and welfare. Today, the program remains nearly unchanged, largely recognized as a benefit payout to retirees which we are all asked to pay. The original program was based on a life expectancy of sixty-two, and the proper age to start collecting benefits was sixty.

Therefore, at the time, the program was more than able to provide a living wage to its needy constituents, most of whom were still recovering from the carnage of the Great Depression. Eventually, the age to receive full benefits became sixty-five, the age at which it is still today. The trick of the program was that its members were not expected to live to the age at which they could cash out on full benefits, and thus the program stayed alive. However, two factors are now at play affecting the government’s ability to continue to pay — first, the current life expectancy, seventy-seven, which is significantly greater than it used to be, and second, the rapidly decreasing pool of contributors supplying a fund sought after by a rapidly increasing pool of beneficiaries, many of whom are baby boomers.

The first year in which baby boomers became of age to receive the benefits was 2011. This leaves fifteen years of baby boomers yet to collect their payout, leading to what may be a rather dull future for the fund. It’s pretty clear to see how the program is going downhill (it is currently on pace to go bankrupt in the year 2033.) Even though the government may ask for increasingly larger amounts out of our paychecks in the next few years, it may not make it to 2035, due to a life expectancy which will likely be higher than eighty before it makes it to that centennial birthday.

I recently started a new job and received my first paycheck, and I was disheartened to see that 6.2% of it gets taken out and contributed to Social Security. I had never had an official hourly waged job before, and the sight of a substantial amount of my paycheck being taken out made me curious for what purpose the money was being taken — and if I would ever see it back again. After research and discussion with my parents, the depressing reality that I most likely will not be able to access the benefits which have assisted the elderly since 1935 made me quite irate.

So, after this realization, I, like many others have done, began brainstorming possible solutions to prevent the program’s impending collapse. I believe the government will have three options to salvage the program: raise the age to receive full benefits above sixty-five, decrease the payouts to beneficiaries, and/or increase the tax on everyone’s paychecks.

The decaying state of Social Security is an incredibly frustrating problem that affects everyone, and I hope the government does at least attempt to ameliorate the ailing fund. However, I am not very secure in my future ability to receive Social Security, and so I will take my own actions and be an aggressive saver to ensure that I have my own safety net of funds, rather than purely counting on Social Security for that money. Receiving Social Security benefits would be a fantastic bonus, but the current forecast leaves me with nothing when I turn sixty-five.
This time next year, I’ll be filing my first tax return. I’m already looking forward to receiving the federal tax back, but only forty seven years will tell if I will get that Social Security money back — so much for calling it “Security.”