Actuaries lay out Social Security fix

Marketplace Staff Sep 5, 2008
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Actuaries lay out Social Security fix

Marketplace Staff Sep 5, 2008
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TEXT OF STORY

Renita Jablonski: Back to this side of the pond, talk of Social Security reform dropped off the radar months ago. But the American Academy of Actuaries says we’ve got to jump-start that discussion as soon as possible. The group is laying out options today to fix the problem. Danielle Karson reports.


Danielle Karson: Right now, the Social Security System’s picture is rosy. Martin Bernstein is a consultant to the National Commission on Social Security.

Martin Bernstein: People have heard such scare stories about Social Security, that they believe that it is going bankrupt. Well, it’s building a surplus.

Bernstein is right. The program is showing a $200 billion surplus. But in about seven years, Bruce Schobel at the American Academy of Actuaries says, that cash flow will start turning red.

Bruce Schobel: As the baby boomers retire in larger and larger numbers, Social Security’s outgo is going to grow much faster than its income will, because the income depends on the number of workers.

Not only will retirees outnumber workers, but people will live longer. So Schobel says raising the retirement age past 67 has to be part of any rescue plan, as unpopular as the idea might be.

Schobel: We think that it’s a demographic solution to a demographic problem.

In Washington, I’m Danielle Karson for Marketplace.

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