by Myra Watters

Created on: September 16, 2008

Social Security should not be abolished. There are too many Americans depending on the System. For many elderly Americans, Social Security is their major or only source of income. Not only does the System provide benefits to the elderly, but it also provides disability and survivors' insurance protection for younger workers and their families. These benefits are very important for the well-being of Americans Citizens when they can no longer work

However, in order for the Social Security System to continue providing benefits, major changes must be made. The System will not be able to survive unless changes are put into effect in the near future. Demographics is said to be the main reason for the System future financial problem. Since the System began in 1935, the life-expectancy of Americans has doubled. According to the Social Security Administration, " in about 30 years, there will be twice as many older Americans as there are today and the number of workers paying into the system will drop from 3.3 today to about 2.1 in 2034."

Social Security is a pay-as-you-go system. This means that today's workers are paying
for the benefits retirees and others are receiving today. At the present time, benefits being paid are less than the taxes been collected. The balance is put into trust funds. According to the Administration, "there are a large reserves in the trust funds, but the money is small compared to future scheduled benefit payments. In 2017 benefits owed will be more than taxes collected, and Social Security will need to begin tapping the trust funds to pay benefits. The trust funds will be exhausted in 2042. At that time, Social Security will not be able to meet all of its benefit obligations if no changes are made."

The year of 2042 is 34 years away. If you are now receiving retirement benefit, you make be feeling that you will be okay, but what about your children and you grandchildren? What about the younger workers who families are depending on these benefits far beyond 2042? If you are 30 years old now, you are probably paying into the system and you are expecting to reap the benefits at retirement. The facts are the System will not be able to meet its obligations to you-unless steps are taken immediately to secure the System future obligations.

Many suggestions have been made as to how to guarantee that the System will be able to continue paying benefits in the future. Some are the suggestions made are to: reduce benefits, raises Social Security taxes, and pre-funding (investing in stocks and bonds).
Americans may disagree on what should be done or how to do it, but most agree that in order for the System to meet its future financial obligations changes must take place.

"The 2007 Annual Report of the Board of Trustee notes that "projected trust fund deficits should be addressed in a timely way to allow for a gradual phasing in of the necessary changes and to provide advance notice to workers. Making adjustments sooner will allow them to be spread over more generations."

Reference: www.socialsecurity.gov
Social Security Online Electronic Booklet
(Publ. #05-10055)

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