The year is 2008. You are in college. Free as a bird, except for the occasional term paper or exam. Your worries consist of the ever-challenging decision of what movie Cheap Seats is showing or what sports game to attend.
Now let’s fast-forward several years. You have engaged yourself in a career that has spanned most of your lifetime, raised a family and are now starting to embark upon retirement. Enter the benefits you have been promised through Social Security. But wait, what would happen if the United States government ran out of their proposed funds and you and your loved ones were left in a tightened financial situation? What if you did not receive adequate benefits to use in your retirement despite years in the workforce?
You may be thinking, “Why should I care? This issue will not affect me in the near future.” My suggestion to you is to start caring, because it is your future that is endangered.
The Social Security sector of the government is the largest government program in the world and provides an incomparable amount of financial benefits to Americans. But with the “baby boomer” generation representing what may be the largest aging generation to need financial assistance in history, the future of Social Security funding looks dim. According to an October 2008 article in Money magazine, with so many Americans heading into retirement soon, “benefits will exceed revenue, and Social Security will have to draw on [the] trust fund.” But experts estimate that by 2041 the trust fund will be dried up.
Not only do Social Security benefits support retirees and the elderly, they also support those who are disabled, widowed or hold significantly lower lifetime earnings. For many elderly widows whose largest portion of wealth comes from Social Security, “poverty rates run as high as 40 percent,” according to a policy brief put out by the Maxwell School of Citizenship and Public Affairs at Syracuse University. In addition, the disabled and their families are more vulnerable financially than the general population, often suffering an approximate 30 percent drop in living standards.
Now are you beginning to see the big, scary future if something is not changed? With a new presidential term coming just around the corner, now is the perfect opportunity to develop a plan for improvement. There are already many suggestions for reform in the works.
Future beneficiaries could receive adequate savings, without having a burden posed upon them from previous recipients. The Heritage Foundation suggested in 2004 developing nest eggs, so that upon retirement, individuals could utilize these accounts to increase monthly income. They could also be reserved for an emergency or left to family members. In addition, the Brookings Institution has predicted that the national budget deficit would be eliminated through adjustment of inflation and taxes, and therefore would not be touched by Social Security. The government could also raise the survivor benefit in order to improve coverage for widows and ensure a plan similar to what would have been the couple’s previously combined benefits. Racial and ethnic barriers could dissipate so as not to affect future earnings.
And so you see, this topic is a very prominent issue today because of the possibility that in our lifetimes the funding for Social Security will be expended. I urge you to consider what your future would be like without this stipend from the government, and what our country would look like if millions of Americans were left struggling in years to come.
You too could be one of these Americans. What will you do about it?
Meredith Downes is a freshman.