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Happy 89th Birthday, Social Security!

Posted on 08/14/24 by Jamie Harding

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social security cards and US money - retirement concept

Celebrating 89 Years of Social Security: A Sacred Promise

As we mark the 89th anniversary of Social Security, it’s a good time to reflect on its profound impact on American society since its creation in 1935. Signed into law during the Great Depression, Social Security emerged as a foundation of hope and stability for millions of Americans facing economic uncertainty. Today, over 65 million Americans receive the money they've earned over a lifetime of hard work.

A Pillar of Economic Security

Social Security was born out of a commitment to provide a measure of income security for citizens who, through no fault of their own, found themselves without income as they aged or fell on hard times. The original idea was simple yet groundbreaking: workers contribute a portion of their earnings during their working years, and in return, they receive guaranteed income upon retirement.

This system has not only endured but has expanded over the decades. What started as strictly a retirement program now includes disability benefits and survivor benefits for families of deceased workers. The program now also has automatic cost-of-living adjustments to help millions of older Americans keep pace with inflation. These changes have ensured that Social Security meets the evolving needs of American society.

Impact on American Lives

The impact of Social Security cannot be overstated. For millions of retirees, it provides reliable income that allows them to live with dignity and independence as they age.

Social Security plays a pivotal role in promoting economic stability for individuals and communities by providing a steady stream of income to retirees, who spend it on the necessities of daily life, contributing $1.4 trillion a year to the US economy. Additionally, it reduces poverty among vulnerable populations and lessens the burden on other government programs.

It also serves as a foundation for retirement planning, allowing individuals to supplement their private savings and investments with their Social Security, thus bolstering their personal financial security.

Challenges and the Future

Social Security is paid for by dedicated payroll taxes and the interest on those contributions that have built up in the Security Trust Funds. Before 2021, Social Security collected more in taxes and interest than it paid out, so it built up reserves to support the retirement of the “Baby Boomer” generation. Today those reserves are used to supplement incoming payroll tax income, but the Trust Funds will face a shortfall in 2035 according to current estimates.

The shortfall is primarily caused by lower birth rates (meaning fewer workers paying in) and a growing population of retirees. By 2035, Social Security is still projected to be able to pay 80% of benefits, but a cut of 20% -- an average of over $4,000 a year -- would hurt both individuals and communities.

Before the Trust Funds run out of money, Congress can decide to cover the shortfall by raising taxes, cutting benefits or coming up with additional funding sources.

Looking Ahead

As we celebrate the 89th anniversary of Social Security, it’s important to recognize its enduring value and the profound impact it has had on American society. Through decades of economic upheaval and social change, Social Security has remained a steadfast source of income for millions of Americans, representing our nation’s commitment to ensuring economic security.

Looking ahead, it is incumbent upon us to protect and save Social Security for both current and future generations. This will require thoughtful policies that preserve its core principles of fairness and sustainability while addressing the challenges of a rapidly changing world. By doing so, we can ensure that Social Security continues to fulfill its promise of providing an earned and guaranteed source of income for all Americans.

Let us reaffirm our commitment to Social Security’s mission and recognize the profound impact it has had on the lives of countless individuals and families across the United States. Happy 89th birthday, Social Security – may you continue to serve as a beacon of stability and security for generations to come.

 

 

 

 

This story is provided by AARP Alabama. Visit the AARP Alabama page for more news, events, and programs affecting retirement, health care, and more.

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