Today’s Workers Fund Today’s Retirees
In other words, the Social Security taxes paid by today's workers and their employers are used to pay the benefits for people who are currently retired, and for other beneficiaries such as workers who become disabled or the families of workers who die.
- Today, there are 3.3 workers paying into Social Security for every person who receives benefits, for a ratio of 3.3 to 1.
- By 2030, that ratio will be 2 to 1.
Part of the reason for the steep decline is that the oldest of the 79 million baby boomers will begin retiring in 2008. At the same time, birth rates are declining.
For now, Social Security is still taking in more money than it pays out in benefits. Any money that’s left over goes into the Trust Funds.
- Currently, the Trust Funds have large reserves, but by 2018 those surpluses will start turning into deficits.
- The benefits owed will be more than the taxes collected, and Social Security will have to dip into the Trust Funds to pay benefits.
- In about 30 years, there will be nearly twice as many older Americans as there are today. Those changing demographics put Social Security benefits in jeopardy.
What does the future hold for Social Security benefits?
