Financial
Social Security
Congress expected individual savings and other resources to play a significant role. Today, Social Security provides some income to nearly all older adults, and is the largest source of income for most. Specifically, it provides more than 40 percent of aggregate income to more than 90 percent of elderly households. Social Security's future role could change due to the program's long-term financing challenge and subsequent reforms.
According to 2001 "best-estimate" assumptions, Social Security's cash flow will turn negative in 2016 (i.e., spending will exceed tax revenues) and the trust funds are expected to be exhausted by 2038. Potential reforms to Social Security's current structure include reductions in promised benefits (e.g., reductions in cost-of-living increases) and/or increases in program revenues (e.g., increases in payroll taxes). Other proposed reforms include full or partial privatization - investment in privately owned but regulated individual accounts that hold stock and other assets.
Updated: November 2, 2007
