Social Security and the Economy
Social Security and the Economy
John Damon McCulley
COM/156 – University Composition and Communication II
10/27/10
Laurie Ryan
Axia College of University of Phoenix
Even though according to the government, Social Security will be funded until the year 2040 (Social Security Administration, 2010), Social Security will not subsidize all of American taxpayer’s retirement because the Baby Boomer generation began retiring in 2008, by 2030, there will be 34 million more Americans drawing Social Security benefits than in 2010. Social Security alone will not subsidize all of American taxpayer’s retirement in the years to come; as a result, taxpayers will need to plan for retirement through other avenues such as Individual Retirement Accounts (IRA’s), 401K’s, or other investments. When the Social Security Act was instated, the intention was to have a social pool of insurance to be paid in by all working Americans by setting a tax on earnings. The money was collected each year and put into a fund where it could be drawn from at retirement age based on a set of standards and rules. Over the years, the economy has evolved into a global one, thus drastically changing the economics from the time Social Security was enacted. Throughout the years, Congress made many attempts to reform Social Security to keep up with the economic changes, however, these attempts have created merely a short-term solution at best. “While the financial outlook for Medicare in this year’s report is substantially improved relative to last year, further reform will be needed” (Social Security Administration, 2010, p. 1). In 2010, Social Security expenditures will exceed tax receipts for the first time since 1983, and there will not be a cost of living increase until 2012. Americans must start looking at how to subsidize their retirement, and not rely on Social Security to do so especially as a stand alone retirement. With the first wave of the
John Damon McCulley
COM/156 – University Composition and Communication II
10/27/10
Laurie Ryan
Axia College of University of Phoenix
Even though according to the government, Social Security will be funded until the year 2040 (Social Security Administration, 2010), Social Security will not subsidize all of American taxpayer’s retirement because the Baby Boomer generation began retiring in 2008, by 2030, there will be 34 million more Americans drawing Social Security benefits than in 2010. Social Security alone will not subsidize all of American taxpayer’s retirement in the years to come; as a result, taxpayers will need to plan for retirement through other avenues such as Individual Retirement Accounts (IRA’s), 401K’s, or other investments. When the Social Security Act was instated, the intention was to have a social pool of insurance to be paid in by all working Americans by setting a tax on earnings. The money was collected each year and put into a fund where it could be drawn from at retirement age based on a set of standards and rules. Over the years, the economy has evolved into a global one, thus drastically changing the economics from the time Social Security was enacted. Throughout the years, Congress made many attempts to reform Social Security to keep up with the economic changes, however, these attempts have created merely a short-term solution at best. “While the financial outlook for Medicare in this year’s report is substantially improved relative to last year, further reform will be needed” (Social Security Administration, 2010, p. 1). In 2010, Social Security expenditures will exceed tax receipts for the first time since 1983, and there will not be a cost of living increase until 2012. Americans must start looking at how to subsidize their retirement, and not rely on Social Security to do so especially as a stand alone retirement. With the first wave of the
References: USA Today. Wolf, R. Social Security hits first wave of boomers. Retrieved October 17, 2010 from “http://www.usatoday.com/news/washington/2007-10-08-boomers_N.htm.” Social Security Administration. Status of the Social Security and Medicare Programs. Retrieved October 17, 2010 from “http://www.ssa.gov/OACT/TRSUM/index.html.”