Social security is the actions programs by the government that are aimed at improving the welfare of the society by offering guarantees the full access to resources like food and shelter to the population. The main aims of social security are to improve and maintain a respectable living standard for vulnerable segments of the society that involves young children, unemployed persons and the sick within the society. The benefits are not discriminative in any way since they usually increase every year with inflation and the benefits of the disabled beneficiaries are not manipulated by selfish individuals for their own gain because they are run by government owned institutions.
If action is not taken to improve the welfare of the social security by now then by the year 2040 expected benefits might be deducted by 26% and will continue to be deducted annually from then onwards and by the year 2080 benefits will be deducted by 30% according to the current scheduled levels. Therefore it is not advisable for one to depend wholly on social security but should also engage in savings and pension plans.
Many serious problems are facing the social security especially financial complications but these will not affect current retirees since the effects are long term and the severity of the matter is increasing gradually. The main reason for this is because the birth rate is reducing while people are living longer. This will be a major problem in the coming decades since at this time workers will be unable to pay the expected benefits due to the tax rates. Therefore payroll taxes will rise and benefits of the young workers shall be cut. Other countries such as Australia, Sweden and Britain are facing similar issues but have established personal accounts in order to resolve the issue.
A major transformational change is required in the social security sector to ensure future problems that could have been avoided do not occur. Some strategies will have to be introduced to aid in the change they include, reducing benefits, raising the payroll taxes, consuming general revenues, later funding of impending benefits through direct investment or individual savings accounts. President Bush also gave some principles on transforming the social benefit sector and appointed a bipartisan commission that had to follow these principles to the latter; the move is rather expensive costing trillions of tax payer’s money but the results will have a great bearing on the future of social security. This system needs a complete overhaul of its functioning to enable it accommodate the problems that will affect it in future.
Social Security Administration website 12th November 2013 from: http://www.socialsecurity.gov/qa.htm.