Social Security Reform

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Social Security Reform
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How Social Security Works

• Employee pays 6.2 of salary into SS Trust Fund
• Employers pay 6.2 for each employee into the SS
  Trust Fund

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• SS Trust Fund makes payments to
• Retirees
• Disabled
• Survivors
• Dependents
• Any surplus taxes go to the Social Security Trust
  Fund, secured in
• the form of US Treasury Bonds

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Future of Social Security

• Adjustments made to program to
• meet changing conditions
• 1983 increased payroll taxes
• Extended retirement age from 65 to 67
• Increased trust fund reserves and contributions
  to beneficiaries
• 2001 commission appointed to study ways to
  improve Social Security

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Effects of Retiring Baby-Boomers
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Projected Outgo
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Worker per Beneficiary Declining
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Trust Fund Exhausted by 2034
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What do your think?

• What recommendations would you make to Congress
  to help this projected problem?