Strain on Social Security mounts as retirees increase

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Many people concerned about the financial stability of Social Security are fretting over 2034, the year that the Social Security retirement trust fund is projected to run out of money. But 2030 should also be on their minds, according to statistics from the U.S. Census Bureau.

In 2030, baby boomers — the trailblazing generation that took the '60s by storm and included legendary figures as diverse as Michael Jackson and Bill Gates — will hit an important milestone. They’ll all be older than 65 and if not already retired likely to be retiring soon.
As they exit the workforce, they’ll perpetuate a problem that has long dogged Social Security in that there won’t be enough workers to replace them, further contributing to the program’s woes. The gap as reflected in the ratio of retirees to workers has generally been increasing for decades, with only brief periods when the ratio leveled off or declined slightly, according to the Social Security Administration’s 2018 trustees report.

In 1946, for example, when the first baby boomers were born, the number of Social Security beneficiaries per 100 workers was just three, meaning 100 workers supported the monthly Social Security checks of three retirees. Today, they support 36, more than 10 times as many.

By 2034, the year the retirement trust fund is projected to run dry, they’ll be supporting 45 retirees, according to the report.

Would raising the full retirement age — as many policy analysts have suggested to fix Social Security’s financial troubles — also lower the ratio and less the burden on workers? That would depend on workers’ responses to the increase, according to the Social Security Administration.

If workers chose to postpone their retirement, there would be more workers and fewer beneficiaries, which would decrease the ratio. However, if they chose to retire at the same time and receive a smaller benefit, the ratio would remain the same.

Either way, the agency said, workers would wind up with a lower level of lifetime benefits.

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Social Security Retirement planning Retirement readiness Client strategies Social Security Administration Census Bureau