Anything But Secure - The Social Security Crisis

How ever you try to slice it, the current recipe for social security is a feast or famine proposition. Many factors have contributed to its shortfall.

In 1977 the social security wage cap was adjusted to cover 90% of earnings, and we haven't seen it modified since.  With all the lucrative technological and business advancements, providing huge earning potential for business founders and CEO’s alike, it gives one pause when you consider the impact of not accounting for the income growth in that time.  

One thing is clear; SocialSecurity Tax has not grown to account for the top 1 % income.  To assume these earners had their Social Security tax requirement paid in the first half-hour of 2020 isn't farfetched.  On the other end of the spectrum, only about 6% of all workers will reach the cap in 2019 of $137,700, leaving an estimated 94% of earners making less than the wage cap.  The effect of this leaves most Americans paying into Social Security at 12.4% per paycheck, all year long.  While the wealthy got wealthier, the average worker did not making things lopsided.

As our Baby Boomers age, those over 65 accounts for around 16% of the population.  The Boomers are the second most significant portion of the population behind their millennials.  With life expectancy increasing and birthrates falling, the mismatch between old and young has substantial impacts on our outdated tax equation.  We not only have a wage gap but an age gap too.

The insufficiency of our Social Security system and possible solutions can be found in several ways. Adjusting the wage gap to account for the increased life expectancy, low birthrates, and wage disparity would undoubtedly be an excellent place to start.