Alaina Lake

Professor Wilson
ECON 2020
December 7, 2015
My Take on Social Security Solvency
The average life expectancy of Americans has grown from 70 to 78
over the last four decades and this number continues to grow (How Long
People Live in America). Modern science in healthcare has advanced to the
point that we are able to find new ways to prolong life. For this reason there
have been concerns about the current social security program in the United
States. Americans age 65 or older made up 4.3% of the population in the
year 1900. This number grew to 12.4% by the year 2000 (Hobbs et al, 56). In
the 1960s there was a ratio of 5 workers to 1 social security beneficiary and
by 2040 the ratio will be 2 workers to 1 social security beneficiary (McConnell
et al, 274). This means that there isnt as high of a percentage of individuals
contributing taxes as there used to be. Another less commonly known
contribution to the decrease in the ratio of workers to social security
beneficiaries is the fact that Americans are having less children. At the
beginning of the 20th century, 1 out of every 3 people was under age 15
years, by 2000, only 1 of every 5 people was under age 15 (Hobbs et al,
56).
Im sure that nobody could tell what the future population
demographics would be when the Social Security System was put into place

by Franklin D Roosevelt in 1935. However, the way it is set up now is

destined to fail in the near future. Something needs to change.
Social security benefits are available to the elderly as early as age 62
but full benefits arent available until age 66 and this number is currently
being slowly increased to age 67. However, social security taxes are taken
out of your wages on the day you start working as a young teen. The social
security program can be thought of as a universal retirement plan for anyone
working in the United States. With most retirement plans you cannot truly
retire until enough funds have been contributed to your retirement fund to
do so.
Lets do some math. If I average annual income of $20,000 dollars from
age 18-23, $30,000 from age 23-30, $40,000 from age 30-45, & $50,000
from age 45-65, I would have made $1,910,000 from age 18-65. If I take the
current tax rate of 6.2% from that amount it would be $118,420. My
employers would have contributed nearly the same much as I did which
would mean that the government received nearly $236,840 on behalf of me
and my employers for the years and hours that I worked.
Now lets take a look at what I would receive in social security benefits
from age 66-78. This is a total of 12 years. According to a social security
benefit calculator that I found through a simple google search, if my current
annual salary is $50,000 I will be receiving approximately $1,366.00 in
benefits each month. If I calculate this throughout the 12 years that I, as an

American, am expected to live, I will receive $196,704 in social security

benefits. This means that I will receive $78,284 more than what I personally
contributed and $40,136 less than what me and my employers contributed
combined.
However, there are several flaws that could be found in my
calculations. Although the tax rate has been 6.2% for employees and
employers (with a slight dip in 2011 and 2012) for nearly the last 25 years,
this has not always been what was contributed. There are also other things
that I did not include in my calculations such as, making less money for
years that I would have been in college (although my ending salary didnt
necessarily reflect that of a college graduates), and of course nobody can
really predict how long I will really live. Accounting for the inflation that
would have occurred in my 78 years of living is probably the biggest flaw
that appears in my calculations but I will try to make my point anyway.
If enough is being contributed on my behalf, from me and my
employer, then shouldnt I be able to retire at the age of 66 if I am expected
to live until age 78. The social security didnt run a deficit until 2010. This
means that up until that point it ran a profit. What happened to all that
money? Im guessing the government found something other than the
retirement of the elderly to spend it on.
If you really think about it, we are supposed to be a free market. Why is
the government getting involved in our retirement anyway? My personal

opinion is that we should completely get rid of the social security system. We
should teach our future generations the benefits of contributing into a
retirement fund at the same age we start teaching and pushing for sex ed.
Everybody should contribute to private retirement companies and then when
they do retire they can get their retirement savings back. Its as simple as
that. If I go my whole life working without contributing to a fund then the
answer is simple, I will have to work the rest of my life and I wont be able to
retire. I think that it is about time that Americans stop relying on the
government to solve all of their problems. My grandmother worked every day
of her life even through her breast cancer treatments. She never complained
one bit and never expected somebody else to pay the bills so that she could
sit back and relax. If I really cant work into my older years then I will have to
get on welfare and I may become a statistic in the poverty levels of this
country, but this is a result of my carelessness of not contributing in my
younger years.
The only thing that the social security program does is force
Americans to contribute their money so that the government can spend it on
whatever they please in hopes that they may one day get it back. If all the
retirement money went into private retirement companies then the money
would not be in the hands of our ever so trustworthy government and we
would most likely be able to get at least what was contributed on our behalf
to live off of.

If I contribute to the social security program all my life and the age of
retirement is raised and I am not able to receive what was contributed on my
behalf then why would I even want to contribute in the first place. I think that
this forcefulness of our government is crossing the line in our supposedly
free market. The government shouldnt have to be the one that says that I
need to contribute in order to retire. I should be the one that tells myself that
and then I will have to make it happen.
Some might find my opinion of getting rid of the social security
program a little overboard, but I really do think that it is about time that
Americans start thinking for themselves instead of relying on the
government to make their problems go away. People should take
responsibility for their own future and plan for what they want out of life. This
solution sounds a lot better to me then the billions and billions of dollars in
deficit that are expected in future years that will leave the future generation
with a ginormous problem to take care of.

Works Cited
Hobbs, Frank, and Nicole Stoops. "Demographic Trends in the 20th Century."
Census.gov. U.S.
Census Bureau, 1 Nov. 2002. Web. 12 Dec. 2015.

"How Long People Live in America." FlowingData. FlowingData, 2 Oct. 2009.

Web. 12 Dec. 2015.
McConnell, Campbell, Stanley Brue, and Sean Flynn. "Fiscal Policy, Deficits,
and Debt."
Macroeconomics. 19th ed. New York: McGraw Hill, 2012. 274. Print.