Social Security cannot afford to pay all of the benefits it has promised. Beginning in 2017, it will run cash deficits that get bigger every year.
Social Security must be fixed. The best way to do that is to empower workers to save their Social Security taxes in a personal account that they would own, control, and be able to pass on to their children and grandchildren. If nothing is done, Social Security will not be able to pay all of the benefits it has promised younger workers. Once Social Security’s contract is broken a mere dozen years from now, the least affluent workers will be hit the hardest. According to a new study, the lowest-income retirees depend on Social Security the most. Those making less than $5000 per year rely on Social Security for over 86% of their income. Those making more than $75,000 only rely on Social Security for one out of every ten dollars of income. Without personal accounts to fix Social Security, those with less ability to save will be the hardest hit.
The system has a problem, and we need to fix it. Personal accounts are the solution.
Less Affluent Americans Most Dependent on Social Security
Source: Prudential Investment Advisors