Thursday, October 27, 2016

Social Security Funding Problem In 3 Pictures From BloombergPolitics

From BloombergPolitics, "How the Next President Could Save Social Security" by Dave Merrill and Chloe Whiteaker:
The problem
Since 2010, Social Security’s funding mechanism has been taking on water. The number of workers supporting a growing number of retiring baby boomers is not sufficient to pay all the benefits they are due.

Source: BloombergPolitics

‘Trust fund’ draw down
Since there are not enough payroll taxes being collected day-to-day, money is drawn from Social Security’s “trust fund” reserve to meet the shortfall. The $2.8 trillion reserve grew out of payroll tax increases initiated in 1984.

Source: BloombergPolitics

Reserve depletion, 2034
When the trust fund reserves are depleted in 2034, retirees will collect only what the workers’ payroll taxes can provide: about 79 percent of benefits. So, for example, instead of an annual $18,000 benefit, a retiree would receive $14,220.

Source: BloombergPolitics

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