Roosevelt signed into law the "Social Security Act ", in 1935 it was a system to aid the elder or their survivors. Then in 1956, the law was amended to also provide disability benefits. The SSI program provides benefits for aged, blind and disabled people without regard to prior workforce participation. As of June 30, 2013, 57.5 million people or 18% of the U.S. population were receiving monthly Social Security benefits as per the United States Department of the Treasury. With so many people receiving their SSI benefits it is no surprise as to why Americans who are years from retiring worry if they will receive their benefits. It is known that SSI takes less than what it pays out and that it could reach deficits as early as 2020. Having the opportunity to reflect on ways to prevent this financial crisis, Social Security must be reformed.
Payroll taxes are levied on the gross wages of workers and from the beginning of the Social Security program to present, payroll taxes have accounted for ninety-six percent of all income to the Social Security program. Although, for workers who earned average wages and retired at age sixty-five in 1980, it took 2.8 years of receiving benefits to recover the value of their payroll taxes (including interest). For workers who retired in 2003, will wait 17.4 years and 21.6 years for workers who retire in 2020. Of coarse this is assuming that Social Security will have enough money to pay their scheduled payments for this entire period. In general each December benefits are increased based upon the rate of inflation in the previous year. However, with recent years SSI having increased a small percentage or none like in 2009 and 2010, has most elderly Americans struggling. In fact, in the last seven years with the exception of 2008 (5.8% increase) there has been a median of less than 1.5% increase in Social Security benefits. .
Social Security is the largest if not the only income for most elderly Americans, however it was never intended to be the only source of income when you retire.