Question

Will social security exist in 45 years? Why or why not? Describe how Social Security has been one of the three legs of retirement planning.  

Answer 1

Social security is any government system that provides monetary assistance to people with an inadequate or no income.

We do believe that social security will exist in 45 years. It was well understood when Social Security was first created that demographics would change over time, and people would live longer. The idea was that as we had people living longer, we would adjust the Social Security tax rates, retirement age and benefits to keep everything in balance. But to maintain balances, changes are needed to be made. The number of beneficiaries will get doubled in the next few years while at the same time, the number of taxpayers will only increase by approx 20%. As policy makers look for ways to close the projected long-term deficit, some are suggesting that Social Security should be privatized that is, replaced with mandatory saving in individually owned accounts. Such accounts would let future workers invest some or all of the money they now pay to Social Security in the private markets, allowing them, it is claimed, to earn higher returns than Social Security can offer.

This is one solution. I’m sure there must be other ways too to make social security exist in future for a longer period of time.

It has been a huge success. It provides benefits to millions who are elderly or disabled or who are on the verge of retirement. More than two thirds of elderly derive their incomes from social security. Basically, social security is helping them to not stay in poverty and to live freely. It has been very helpful for them as a means to survive.