economy
Baby boomers are collecting 265% of what they paid into Social Security—and millennials are paying the price
I’m 43 years old, and like other members of my millennial generation, I’m not sure I’ll ever get Social Security benefits. It’s not top of mind for me right now, other than my role as a financial journalist, but the trust fund is due to run out in 2032, and the automatic 22% cut that follows won’t distinguish between who has been paying in and who has been drawing down.
TL;DR
- Retirees this decade are on track to collect about 133% of total taxes paid (or 265% of their own contributions) in lifetime Social Security benefits.
- The Social Security trust fund is projected to be depleted by 2032, after which incoming payroll taxes will only cover about 78% of scheduled benefits.
- A shrinking worker-to-beneficiary ratio (currently around 2.7 to 1, projected to fall to 2 to 1) is the mechanical reason for the system's financial strain.
- The 'pig in the python' metaphor describes how the large baby boomer generation distorts economic systems as it passes through.