The nonpartisan budget watchdog, revisiting one of its favorite subjects, found that Americans retiring this decade are on track to collect, in the form of entitlements, about 133% of everything they and their employers paid in taxes, measured in present-value dollars. Strip out the employer match, and the return nearly doubles: Roughly 265% of what workers put in themselves. A median-wage retiree in 2027 will collect about $730,000 in lifetime benefits on combined contributions of less than $200,000. The math holds together because today’s payroll taxes are covering the gap. Who pays those taxes, and who is retiring and collecting? Largely millennials and baby boomers, respectively.
In nominal dollars, the gap is even more dramatic. A median-wage worker retiring in 2027 can expect about $730,000 in lifetime Social Security benefits, compared with less than $200,000 paid in taxes by that worker and their employer combined, according to CRFB. Benefits outpace total taxes paid after just six years of collecting. They outpace the worker’s own direct contributions after only three.
The consequence is a financing cliff that’s now closely dated. Social Security’s retirement trust fund is projected to be depleted in 2032, with the combined retirement and disability trust funds exhausted by around 2033 or 2034. After that point, according to the SSA Trustees Report, incoming payroll taxes alone would cover only about 78% of scheduled benefits—triggering an automatic, across-the-board cut of roughly 22% unless Congress intervenes before then.
The promise of retirement for Millennials is just a mirage. Conservatives keep sabotaging social security even though it has worked for 3 generations.
First of all, “there’s no money for this” coming from the federal government is a lie, on any topic. They just don’t want to, and take advantage of people not knowing how money works. There’s always money for bombs, but for schools and social services not so much.
Second of all, as others have said, capping social security payments per year is stupid. It should be progressive. The first $x don’t get taxed at all, then higher rates as your income goes high.
Third, it shouldn’t be tied to your personal contributions. We live in a society, despite what anti social conservative monsters say.
While I agree the cap on social security contributions should be lifted, I don’t think we need three separate progressive payroll taxes at the federal level. Currently both income and medicare are separate progressive tax brackets. Taxes are already complicated enough!
Just lump them all together, increase the number of brackets (90% top rate), and tie the income ranges to inflation.
We could increase all progressive income (80% for net worth over $100 million) and inheritance tax, VAT, increased capital gains tax to average of 40%-50% for all families while providing guaranteed housing vouchers, childcare, pensions, food and healthcare for all. And also provide VAT rebates for low-income families. The average working-class family would come out ahead as their share of cost is reduced on basic necessities.
Workers are the backbone of society and should be making these kind of policy decisions, not the Epstein class. The Epstein is extracting all of their wealth off the backs of the workers and tax dollars from the federal government that should be going to the people.