U s social security
Download
1 / 23

U.S Social Security - PowerPoint PPT Presentation


  • 78 Views
  • Uploaded on

U.S Social Security. Luyi Chen, Ying Qin, Siqi Wang. History. Social Security Act English colonists (1601 Elizabethan Poor Law ) Social trends occurred in 19th century Industrial Revolution population shift from the countryside to cities longer life expectancy

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' U.S Social Security' - lev


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
U s social security

U.S Social Security

Luyi Chen, Ying Qin, SiqiWang


History
History

  • Social Security Act

    • English colonists (1601 Elizabethan Poor Law )

    • Social trends occurred in 19th century

      • Industrial Revolution

      • population shift from the countryside to cities

      • longer life expectancy

      • the fading of the extended family

    • Great Depression triggered a crisis

    • Passed and signed into law by Roosevelt in 1935

    • Originally only covered the workers


Key dates for social security act
Key Dates for Social Security Act

  • Adjustments

    • Coverage expansion for dependents and survivors benefits in 1939

    • Cost of living adjustments in 1950

    • Lowering retirement age to 62 in 1961

    • Benefits are taxed first time in 1983


Benefits
Benefits

  • First Payment

    • Began in 1942

    • Single, lump-sum refund

    • Ernest Ackerman (retired one day after Social Security began)

    • A nickel 15 cents

  • 1939 Amendment (1942 to 1940)

    • Monthly payment began 1940

    • Ida May Fuller


How social security financed
How Social Security Financed?

  • Mainly financed by payroll taxes on wages and self-employment income

  • 96% of workforce is required to pay

    • Exception:

      • state and local government workers

      • Election workers who earn $1,200 or less per year

      • Ministers who elect not be covered

      • Federal workers (pre-1984)

      • College students

      • Self-employed workers (<$400 per year)

  • Funds collected 744.9 Billion in revenues

    • 84% from payroll taxes

    • 2% from taxes on SS benefits

    • Remaining from interest earned on the government bonds



Current benefit policy
Current Benefit Policy

  • Must meet the eligibility requirement to receive the benefits

    • Work at least 10 years

    • 40 work credit to be insured

    • Disability: at least 20 work credit during last 40 years of calendar quarters

    • % women insured are increasing





Current benefit policy1
Current Benefit Policy

  • Spousal and Children:

    • Spousal benefit:

      • Not worked:50% of the husband/wife at NRA

      • Has own retirement benefit

    • Unmarried children under 18 or disabled before 22 or between 18 and 19 and a full-time student can receive benefit (one-half of full retirement benefit amount)

    • Limit: 150 to 180 percent of your retirement benefit

  • Prohibits payments to:

    • Individuals residing in certain countries

    • Individuals confined to a prison or commit a crime

    • Aliens live outside the US for 6 months or more


Current situation
Current Situation

  • “ In Crisis”

  • Will not change the system in any way for those born before 1950

  • 1/3 of Americans older than 65 receive income from SS (90% of total income)

  • Pay-as-you-go system:

    • 16 workers support one beneficiary

    • Today 3.3 workers support one beneficiary

    • Estimated to continue to decrease


What caused the problem
What caused the problem?

  • The decreasing number of workers supporting the system

  • Continuous developing technologies

    • Improve living conditions live longer

  • Early retirement age

  • Indexed to wage growth instead of inflation

    • Benefits grow much faster than the rest of the economy


Suggested solutions
Suggested Solutions

  • Limiting benefits for wealthy retirees

  • Indexing benefits to price instead of wages

  • Increasing retirement age

  • Changing the benefit formula to create disincentives for early retirements

  • Increasing taxes

  • Reform earlier, save much more

    • The delay will result in higher tax only


Create private retirement accounts
Create Private Retirement Accounts

  • Proposed by President Bush

  • Allow younger workers to put part of payroll taxes into personal accounts

  • Entirely voluntary

  • Wide ranges of investment choices

    • Stocks

    • Bonds

    • Many more…

  • Pass on to their children


Results
Results

  • Will not save SS because of risks of investments decisions

  • Failed

    • Unable to even gain strong support from the Republican-control Congress


Questions
Questions

  • Q: Will the new system continue provide benefit for nonworking spouses, people with intermittent work histories, workers with low income, and people with disabilities?

  • Q: Higher risk because of investment decisions?

  • Q: Create Federal Debt?

    • Increase government spending

    • Widen annual deficits


Private accounts
Private Accounts

  • Increase Federal Debt and Interest Payments

    • President Bush

      • $17.7 trillion in additional debt (equal to 19.3 % of GDP) by 2050

    • Robert Pozen

      • $3.5 trillion in additional debt (equal to 3.8 % of GDP) by 2050

    • Senator Lindsey Graham

      • $19.1 trillion in additional debt (equal to 20.8 % of GDP) by 2050

    • Senator Chuck Hagel

      • $24.2 trillion in additional debt (equal to 26.5 % of GDP) by 2050

    • Senator John Sununu and Representative Paul Ryan

      • $85.8 trillion in additional debt (equal to 93.7 % of GDP) by 2050


Republicans vs democrats
Republicans vs. Democrats

  • Republicans

    • Republican Candidate Fred D. Thompson

      • 401(K) style proposal

        • Automatically transfer into the personal accounts

        • Matching $2.50 for every $1 up to $1,000 monthly

        • An incentive to attract Americans to save more

        • Invest in high yield instruments

        • Increase tax revenue through the program

    • Republican Candidate Giuliani

      • Support for Bush's failed plan to privatize social security


Republicans vs democrats1
Republicans vs. Democrats

  • Democrats

    • Senator Clinton

      • Private accounts would be harmful to Americans

        • Stock market fluctuations, women and family assistance, disabled workers and survivors, federal government debt

      • Propose Universal 401(k) Plan

        • Government match first $1,000

        • Up to $500 for individuals in the $60,000 to $100,000 bracket

    • Senator Obama

      • Oppose any effort to create private accounts

      • Raise the retirement age

      • Cut benefits

      • Adjust the cap on the payroll tax



ad