Future Social Security Problems Essay - 1100 Words

Future Social Security Problems (Essay Sample) Content: Name:Professor:Course:Date: Future Social Security ProblemsSocial Security is the establishment of financial security for many Americans who includes disabled persons, retirees, and families of disabled, retired or deceased employees (Ruschmann Maryanne 32). Social security is a concept that preserved with the law in which every person, as an associate of the society, has the right to enjoy social security (Young 28). In social security program, signatories consent that the society wherein an individual lives should assist them to expand and to capitalize on all the advantages including work, culture, social wellbeing, which are provided to them in the state. In social security, the working group in the country pays taxes to the program and this money is used to pay the beneficiaries (Ruschmann Maryanne 35). Due to various developments in the world today, which include demographic issues and economic crisis, this program is facing many problems. Thus, this paper see ks to outline the future problems that the program is likely to experience when paying social security. The world today is experiencing increased population. Many countries, including the U.S have recorded increased size of the population, in the recent years (Conesa Carlos 2). This trend is expected to carry on and in the future, the U.S will be highly populated. The fertility rate is declining faster than projected. In 1960, a typical female of child-bearing age would have fertility rate of 3.6 children but today it is just two and by next six years, it is estimated to be about 1.9 (Diamond Peter 119). This is already below the rate of 2.1 required just to reinstate the existing population (Martin Jeffrey 1306). Additionally, since many countries all over the world have a big population, people in those countries will be faced with increased competition of resources (Conesa Carlos 2). Due to this, many individuals will be forced to look for new opportunities abroad. As a resul t, in the future there will be a swell in the number of migrants migrating into the U.S. With the increase in the population in the country, there will be a situation whereby there will be financial constraint. With time, a huge number of working citizens in the country will move towards retirement (Young 35). Due to increase in the number of individuals expecting to benefit from this program, yearly cash surplus will get smaller and then disappear. This will make it extremely hard to pay for the increased number of retirees, and families of disabled or deceased employees (Ruschmann Maryanne 42). In this case, the government will be forced to borrow in order to get money to pay the beneficiaries of this program.Another problem associated with the paying of social security in the future is decline in taxes, the main source of fund used in paying social security (Young 37). Since the future taxes are projected to be less than payments, most retirees and other beneficially will have t o wait for an extensive period before they are paid (Martin Jeffrey 1306). With backlog in payment of social security benefits, most working citizens will hesitate from making their contribution to the program for the fear of failing to get their benefits upon their retirement (Conesa Carlos 2). Additionally, due to the delay in payments, most people will lose faith in the program and; as a result they will fail to pay their taxes to this program thus making the problem paying the beneficiary even more complicated, due to shrinking of financial resources in the program. The plan of social security solvency is roughly 75 years (Diamond Peter 124). However, due to the weak economy and demographic pressures, it is presently solvent only until 2033 (Martin Jeffrey 1306). After that, without restructuring, it would disburse about 75 percent of pledged benefits. In the recent times, the worlds have been experiencing financial crises. These crises affect various economic activities in different sectors of the economy. Due to financial crises, the business goes down and many companies experience great losses (Conesa Carlos 2). Weakening of the economy together with demographic pressures has made it difficult for the government in dealing with the increasing amount of payment of pledged benefits. Although the government has set the solvency of the social security until 2033, with the countrys economy being unstable and population in the country increasing, without reforms, it will almost impossible to pay all social security benefits to the beneficiaries (Diamond Peter 132). At the moment, the nation is experiencing retirement crisis (Ruschmann Maryanne 51). Life expectancy is rising faster than projected. In the year 1940, a 60-year-old person could live for the next 17 years. However, today it is 20 years, and by the year 2040 it will be about 23 years (Martin Jeffrey 1307). Even before the depression, individuals had not saved sufficient amount of money to c ompensate for the loss of traditional pensions (Young 51). The slump and slow recovery of the economy have made things worse. Recently, there has been an increase in the number of people who are retiring from various jobs (Conesa Carlos 2). Increase in the number of the retiree in the country means that additional money is required to fund payment of soci...