The Future of Social Security Com 156
The Future of Social Security
COM/156
December 5, 2010
Karen Williams
The Future of Social Security
In the United States, many people believe that Social Security will be enough to support them upon retirement and have not prepared themselves adequately by establishing pensions, retirement plans and savings accounts. Believing this way can get many people into trouble once they reach an age that they would like to retire. These people are finding out that Social Security is just not enough by itself. Many people are discovering that they need other means of income along with Social Security to survive and pay the bills. If this has not been planned for ahead of time, many people find themselves working past retirement age, or moving in with family as a means to get by. When Social Security was created, the idea was that it would support a person upon retirement. However, at that time, people were not living as long as they do now and the standard of living was much lower. In 1930, the Census, which is a count of all of the people in the United States, found that 58% of men over 65 were still working; by 2002, the number had declined to 18% (New York Times, Nov. 11, 2010). A fact such as this is something that could put a significant strain on the Social Security Administration making many wonder if it will be around for much longer, considering Social Security did not make adjustments for inflation, it pays more than just the retired worker, and the baby boomer generation was not expected when it was created, with little solutions to resolve these issues.
Originally, the Social Security Act, signed into effect in 1935 by President Roosevelt, did not include any adjustment for inflation. In 1950, Congress increased benefits and then continued to do so here and there. In 1972, President Nixon introduced the COLA (Cost of Living Adjustment). “COLA is an adjustment made to a salary structure to account for the change to an index. COLA
COM/156
December 5, 2010
Karen Williams
The Future of Social Security
In the United States, many people believe that Social Security will be enough to support them upon retirement and have not prepared themselves adequately by establishing pensions, retirement plans and savings accounts. Believing this way can get many people into trouble once they reach an age that they would like to retire. These people are finding out that Social Security is just not enough by itself. Many people are discovering that they need other means of income along with Social Security to survive and pay the bills. If this has not been planned for ahead of time, many people find themselves working past retirement age, or moving in with family as a means to get by. When Social Security was created, the idea was that it would support a person upon retirement. However, at that time, people were not living as long as they do now and the standard of living was much lower. In 1930, the Census, which is a count of all of the people in the United States, found that 58% of men over 65 were still working; by 2002, the number had declined to 18% (New York Times, Nov. 11, 2010). A fact such as this is something that could put a significant strain on the Social Security Administration making many wonder if it will be around for much longer, considering Social Security did not make adjustments for inflation, it pays more than just the retired worker, and the baby boomer generation was not expected when it was created, with little solutions to resolve these issues.
Originally, the Social Security Act, signed into effect in 1935 by President Roosevelt, did not include any adjustment for inflation. In 1950, Congress increased benefits and then continued to do so here and there. In 1972, President Nixon introduced the COLA (Cost of Living Adjustment). “COLA is an adjustment made to a salary structure to account for the change to an index. COLA
References: About.com, Sally Kane hrVillage.com, labor relations, hr FAQ’s Ohio History Central, An Online Encylopedia of Ohio History, Social Security Act Social Security Benefits, Adam Crisp The New York Times, Times Topics, Social Security, October 30, 2010 Times Free Press, timesfreepress.com, Chattanooga Times Free Press Unemployed turn to Social Security Benefits, Adam Crisp Wikipedia www.SocialSecurity.gov, News Release, Social Security Attacks Disability Backlog, Tues, October 9, 2007