Social Security: A Permanent Part of America's Retirement Fabric

I was recently interviewed by a reporter for a UK publication about the US defined contribution system. During the interview she suggested that some she had interviewed questioned the future viability of Social Security. I pointed out that as long as there are American workers paying Social Security taxes there will be Social Security benefits paid to retirees.  Suggestions that Social Security “will not be there" for future generations needs to stop.  It is true that the baby boom retirement tsunami will make it difficult to meet the current level of promised benefits and difficult decisions will have to be made about who gets what level of benefits and when. But the representation that Social Security will not be there at all is nonsense. It is estimated that ongoing tax revenue will cover 75% of benefits even after the trust fund is depleted. We should stop unnecessarily scaring Americans workers at a time when they need less, not more things to worry about.

It is my view that at some point the reality that current Social Security benefits are paid for by current tax collections will be recognized. At that point adjustments like delaying eligibility for full benefits and reducing the benefits to higher paid workers will be made to bring benefit expense and revenue into line. In any event, Social Security payments in the future will continue to be an important reason that Americans over normal retirement age continue to have the lowest poverty rates of any segment of American society.