Proposed Changes to Social Security: An Analysis

Abstract

Some 48 million Americans are expected to collect around $518 billion in Social Security benefits during 2005.  Of these, about 70 percent are retired workers.  The ratio of workers covered by Social Security to retirees is approximately three to one but will decrease to about two to one in the next generation.  Furthermore, at present, there are significantly more Social Security taxes collected than benefits paid; the excess is spent to help fund other government programs.  With the Baby Boomers starting to collect benefits in 2008 and large federal deficits already threatening to push interest rates higher, providing for future Social Security funding is being addressed.  This paper explores existing and future demands expected to be placed on Social Security and possible changes that may be implemented to ensure its long-term viability.