Inheritance is not just personal. It’s factors into the broader economy: what we leave behind for future generations, what one generation saves for itself, and for the next.
As Americans, we spend most of our careers paying into social security, with the promise that we’ll get a little money from the country in our old age. But as Baby Boomers age and retire the Social Security reserves are strained.
Baby Boomers expanded the workforce on their own — add into the mix a major influx of women into the workplace, and the dwindling reserves in the disability program and the retirement programs make sense. These are problems that have been predicted for years, and since Social Security was introduced, Congress has adjusted and reallocated budgets to keep the programs solvent and keep benefits stable.
Without any changes, Social Security’s disability reserve fund will run out next year. The retirement trust fund will exhaust in 2034. The facts sound a bit scary, but Stephen Goss, chief actuary of the Social Security Administration, says there isn’t much reason to worry. Even if Congress did nothing to reallocate funds, the money coming into the Social Security program through payroll taxes would keep benefits going at 77 cents to the dollar for retirement, and 81 cents to the dollar for disability.
Still, half of millennials don’t think there will be any money left for them in social security when they retire, according to a Pew poll.
Alicia Munnell, director of the Center for Retirement Research at Boston College, agrees with Goss that Social Security will bounce back. So why the concern? Is Social Security a strained part of a larger retirement system desperately in need of overhaul?
Stephen Goss and Alicia Munnell speak with Lizzie O’Leary to talk about how and when Congress needs to act to keep Social Security solvent, and how current generations should approach retirement in order to maintain benefits for the future.
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