US Social Security Program:
Working population with a job pays payroll tax [6.2% employee, 6.2% employer] - the money goes into Social security pool and then US Govt pays its retirees - monthly pension from that pool. It's incredibly simple and powerful program
Working population with a job pays payroll tax [6.2% employee, 6.2% employer] - the money goes into Social security pool and then US Govt pays its retirees - monthly pension from that pool. It's incredibly simple and powerful program
Till date - The Program has worked because it always gets in more money than it has to pay out. As a result - the Program has a $2 trillion reserves. The excess money is parked in Treasuries...so no risk. This is set to change by 2020 when money in will not be sufficient to pay
So from 2020 - US Govt will use the reserves to pay its beneficiaries and as per some estimates - the reserves will be empty by 2034. It means there will no excess fund to compensate for the shortfall in payroll taxes.
What this tells you - How quickly US is turning old and there will be less number of people working to feed the older population...because that's the basis of Social security program in US
