These children, born between 1946 and 1964, became known as the Baby Boom generation, a term coined by Landon Jones in his book Great Expectations: America and the Baby Boom Generation. Due to a massive difference in the number of Baby Boomers and members of the pre-World War II generation, there were plenty of workers to provide adequate retirement benefits to the generation of their parents. As America prepared to begin the 21st century however, there was much fear among economists regarding how the Baby Boom generation would be supported when its members would become eligible for retirement benefits. The working generation of today is significantly smaller than it was when all Baby Boomers were working. In an August 2009 bulletin the Social Security Administration stated that by the year 2035 the estimated ratio of workers per beneficiary will be two to one. Allowing individuals to contribute to their own private accounts may reduce future loss of money from fewer worker contributions.
Another similar issue in the Social Security system is its reliability. Millions of people who have spent decades working hard for their money take comfort in believing that they will be financially stable in their retirement by means of Social Security benefits. For the younger generations, coming to terms with the fact that Social Security checks may not be enough to make ends meet can both financially and emotionally devastating. A medium income worker born after 1965 can expect less than a 2% rate of return with the existing Social Security system. Over the last 80 years, private investment in the U.S. has earned an average return of nearly 8% (Nichols, Clingman, Burkhalter, Wade and Chaplain, 2009).
As time has passed it has become evident that the ratio of workers to retirees is not fully to blame for the fact that more money is paid out from the Social Security Trust Fund than added. Far from slowing, the government's deficit spending will surge to a record $1.
