2. What is Social Security
“A federal insurance program that provides
benefits to retired persons, the unemployed and
the disabled”
The foundation of financial and economic security
for millions.
~157 million Americans pay Social Security taxes.
56 million collect monthly benefits
Pay-as-you-go program
3. Beginning
In 1935, aimed to establish a system of
income maintenance for older persons to
protect against financial disaster.
Also to ensure a basic level of protection for
the neediest older adults.
Since 1974, to provide compensatory
income to persons, regardless of age, who
experience a sudden loss of income.(p. 703)
4. Social Security: Just the Facts
(Video)
http://www.youtube.com/watch?feature
=player_embedded&v=lHAcy4SNVbo
5. Four “Trust Funds”
1. Old-Age and Survivors Insurance (OASI)
2. Disability Insurance (DI)
3. Hospital Insurance(HI), funded through
Medicare
4. Revenues for the supplemental
insurance portion of Medicare
(p. 703)
6. Funded & Financed
Financed through separate trust funds, with
revenues raised equally from mandatory
participation and contributions of
employees and employers through payroll
taxes, and income based on current tax
revenues. (p. 703)
Social Security is based on the notion of
earned rights as a result of lifetime of work.
Coverage includes 94% of Americans with
the other 6% representing part-time
employees who do not pay Social Security
payroll taxes. (p. 703)
7. Some facts about Social Security
Social Security is the major source of income for most of the elderly.
Nine out of ten individuals age 65 and older receive Social Security benefits.
Social Security benefits represent about 39% of the income of the elderly.
Among elderly Social Security beneficiaries, 53% of married couples and 74% of
unmarried persons receive 50% or more of their income from Social Security.
Among elderly Social Security beneficiaries, 23% of married couples and about 46% of
unmarried persons rely on Social Security for 90% or more of their income.
Social Security provides more than just retirement benefits.
Retired workers and their dependents account for 70% of total benefits paid.
Disabled workers and their dependents account for 19% of total benefits paid.
About 91 percent of workers age 21-64 in covered employment in 2011 and their families have
protection in the event of a long-term disability.
Just over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67.
69% of the private sector workforce has no long-term disability insurance.
Survivors of deceased workers account for about 11% of total benefits paid.
About one in eight of today’s 20 year-olds will die before reaching age 67.
About 96% of persons aged 20-49 who worked in covered employment in 2011 have survivors
insurance protection for their young children and the surviving spouse caring for the children.
8. More facts…
An estimated 161 million workers, 94% of all workers, are covered under
Social Security.
51% of the workforce has no private pension coverage.
34% of the workforce has no savings set aside specifically for
retirement.
By 2033, there will be almost twice as many older Americans as today --
from 43.4 million today to 75.7 million.
There are currently 2.8 workers for each Social Security beneficiary. By
2033, there will be 2.1 workers for each beneficiary.
(http://www.ssa.gov/pressoffice/basicfact.htm)
9. Future of Social Security
Policymakers and the media report terrible
predictions about the future of the “Social
Security Crisis”
This is not the case according to polls that
suggest most Americans support protecting
Social Security
Future benefits will not depend only on the
proportion of workers to retirees, but it will also
rely on the economy's ability to generate
sufficient additional resources to cover Social
Security.
10. Privatization
Critics of Social Security argue for the
point of Privatization or fiscal reform,
making Social Security a savings program
Maximizes rate of return, encourages and
relies on individual savings
Would divert payroll taxes to new
accounts
(p. 708)
11. For vs. Against: Privatization
Pros: Cons:
“Promotes consumer choice Assumes stable economy and
Contributions would be strong individual knowledge
distributed into private/personal and skills to make informed
accounts decisions (p. 709)
Future benefits are prefunded “Starting privatization system to
through direct investments into too costly ($1Trillion +)
stock market “(p. 709) Reduce special insurance
“Individual accounts may protections
reduce future loss of money Will weaken federal retirement
Will allow worker contractual system through risky investments
rights to retirement benefits Exposes workers to be victims of
Will boost economy economic fraudulent bankers and brokers
growth by injecting money into Been proved disappointing in
financial system other countries such as U.K.
Empower individuals by giving Would require costly hiring and
them control of their own training tens of thousands of
retirement decisions.” new government employees”
http://socialsecurity.procon.org/# http://socialsecurity.procon.org/#
pro_con pro_con
12. Other ideas for SS change
“Raise retirement age for full benefits to 70, partial to
65
Increase number of years needed to compute Social
Security Benefits from 35 to 40
Increase payroll taxes
Reducing the cost of living adjustments to a level
equal to inflation
Reducing benefits across the board by 13 percent
Raising the cap on the amount of wages and salaries
subject to payroll taxes
Increasing penalty for early retirement
Eliminating the legacy debt”
(p. 710)
13. References
Hooyman, Nancy R. Et. Al. Social gerontology: a
multidisciplinary perspective. 9th ed. 2011al
gerontology: a multidisciplinary perspective. 9th
ed. 2011 (p. 703-710)
http://www.socialsecurity.gov/pgm/ssi.htm
http://www.nasi.org/learn/socialsecurity/overvie
w
http://www.ssa.gov/pressoffice/basicfact.htm
http://socialsecurity.procon.org/#pro_con
