The Worker - The Worker-to-Retiree Ratio Because social...

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The Worker-to-Retiree Ratio Because social security relies on current workers to pay for benefits to current retirees, the ratio between workers and retirees is important. Ideally, each retiree is supported by a large number of workers so that each worker only has to pay a small part of the retiree’s benefits. As baby boomers grow older, however, more retirees will be eligible for benefits, which reduces the ratio and increases the amount each worker must contribute to social security. In 1946, the ratio was roughly forty workers per one retiree. Researchers project that by the time the baby boomers have all retired in 2030, the ratio will have shrunk to two workers per one retiree. The Social Security Crisis Many people worry about an impending social security crisis of having to fund too many retirees from the salaries of too few workers. Although the program has been running a surplus for many years, eventually people will be drawing social security benefits at a rate faster than workers can contribute. This deficit will force the government to either
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This note was uploaded on 01/31/2012 for the course POS POS2112 taught by Professor Leslietaylor during the Winter '09 term at Broward College.

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