Social Security in U.S.

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Social security is a program by the federal government that provides an income source for you or your legal dependents that is children, spouse or parents if they qualify for benefits. Also, it can be defined as any of the established measures by legislation to maintain a family or individual income or to provide income when all or some income sources are terminated or disrupted or when hefty expenditures have to be incurred. Social security may offer cash benefits to persons faced with unemployment, sickness, disability, loss of the marital partner, crop failure, and retirement from work or maternity (Livingston, 2008). Benefits of social security may be provided in cash or by court order in compensation for claims.

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Social Security is facing a lot of problems currently in U.S. and serious interventions need to be fixed in determination of its future benefit. Social security faces severe financial challenges. The present structure of the program known as pay as you go will be unsuitable as the number of elderly people receiving benefits rises in coming decades. Social security will be only able to pay a fraction of benefits promised to future retirees unless the program is restructured. Additionally, the increasing costs of social security will damage the economy and create pressures to impose a large increase of tax on workers. Federal policymakers have discussed revamping Social Security for years, but they have not acted on reforms (Moon & Conference on Social Accounting for Transfers, 2004).

Many other countries have indicated that privatized retirement systems based on personal accounts can benefit retirees, workers, and the overall economy. America has the chance now to phase out the old-fashioned Social Security system based on government control and taxes and move to a system where individuals possess full charge of their future of finances. The problems the Social Security is facing in the US include; A falling worker-to beneficiary ratio; this is due to demographic shift known as the retirement of baby boomers (Moon & Conference on Social Accounting for Transfers, 2004). This shows that there won’t be enough payroll tax revenue incurred to support the increasing number of beneficiary payments.

Another problem the Social security is undergoing is raising life expectancies. There is a proven improved life expectancy, and the architects of Social Security didn’t predict that there will be an improvement of life expectancies by as the number evidenced. This has led to people living longer than ever and able to attain social security payments a long period. Furthermore, congressional stalemate is another big issue for social security. Congress doesn’t seem to rush to correct what seems to be an imminent shortfall of cash for the program (Livingston, 2008). Consumers will continue to suffer as long as Congress will not make any progress on getting a solution implemented. Also, near- record- low bond yields is another problem since low-interest rates have had the negative impact on people and funds looking to make money from fixed income assets.

The recommendation and the operationalization to address these problems is by increasing Social Security taxes. The workers pay 6.3% currently of their earnings into the Social Security system. If that tax rate were increased gradually to 7.3% percent, it would eliminate like half of the Social Security deficit. Lifting the payroll tax cap also is another recommendation. Lifting the payroll tax cap is a popular idea having 69% of Americans supporting the full elimination of the cap. Raising the retirement age to 68 by the year 2028 it would reduce benefit by 6% and eliminate 16% of Social Security funding shortfall (Livingston, 2008).

Moreover, The US Social Security Administration should create a data-driven process to support the development of methods in screening criteria for recognizing people at high risk for financial incapability. The U.S. Social Security Administration should also ensure systematic development mechanisms for identifying and responding to changes in the capability of beneficiaries over time. This can be done through implementation of a process to survey beneficiaries and payees periodically that could trigger the important to further investigate the financial capability of the beneficiaries.


Unless the U.S. acts, the discussed problems and immense demographic changes will bring the Social Security program to its knees. Without action, the presently pledged benefits under Social Security are a promise U.S. cannot keep. Fixing the above recommended options will help to close the challenges facing the Social Security in the United States since it is the foundation of economic security for millions of Americans.


Livingston, S. G. (2008). U.S. social security: A reference handbook. Santa Barbara, Calif: ABC-CLIO.

Moon, M., & Conference on Social Accounting for Transfers. (2004). Economic transfers in the United States. Chicago: University of Chicago Press.

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