Originally, Social Security was meant to help aging and disable Americans, but with advances in medical technology and life expectancy increasing drastically, the system of Social Security is in disarray. Millenials for example, who have Social Security taken out of their paychecks, may never get to see a dime of this upon retirement. As of now, the money won’t be there when they retire. A simple solution to this problem may be to raise the retirement age.
- When Social Security began, the retirement age of 65 was well above the life expectancy at the time, which was around 56.
- Structurally, Social Security most benefits its earliest users, which is the generation before the Baby Boomers.
- Unless Congress takes action, Social Security is destined to pay out only 77% of present benefits.
“So, if this person lives an average lifespan and gets only those reduced benefits, his real internal rate of return will be -0.23%.”