When Social Security began, it only covered factory and office workers.
It was expanded in the 1950s and grew to include farm workers, domestic workers, and disabled workers and their dependents.
Then, in 2011, the Baby Boomer generation started to retire. And they are living longer.
But birth rates have not kept up.
This has caused an imbalance in the ratio of workers to retirees.
In 1945, there were 15 workers paying into the system for each retiree collecting benefits.
In 2018, there were fewer than 3 workers for each retiree.
Social Security already sends out more money than it takes in.
So far, we’ve been plugging the hole with money from the Social Security Trust Fund.
That money will run out in 2035.
The law says we have to cut benefits for current retirees by the percentage that we fall short.
Here’s what that could mean for you…
Say you got a job with a solid paycheck, paid into Social Security for 40 years, then retired in 2062.
You were supposed to get this much each year!
But once that Social Security Trust Fund ran out in 2035, Congress had to cut everyone’s benefits by 25%…
And so, you only get this much:
But you can manage, right?
You did pretty well for yourself while you were working!
Unfortunately, not everyone’s that lucky.
Someone who made less than you paid less than you into Social Security.
So it makes sense that they will get less out of it when they retire in 2062.
Yeah, it looks a lot worse from their end... Oof.
Think you could live on that much per year?
Does it seem fair to promise people benefits and then take them away?
But remember, the closer we get to 2035, the fewer and fewer options we’ll have.
Until finally... We’ll only have the one.
Note: This is not financial advice