June, 2013
SENIOR BOOM
“The Census Bureau projects that, by 2040, the number of Americans 65 and older will have climbed to 79.7 million, up from 44.7 million in 2013.”
This tidbit was pointed out by Gene Epstein of Barron’s magazine earlier this year.
Mr. Epstein went on to say:
“There are now 4.4 people of working-age potentially supporting each senior citizen. By 2040, each senior citizen will be potentially supported by just 2.7 working-age individuals.”
At age 97 in 2040, either I will be getting ready to check out or I will be dead.
On the other hand, my eldest child will then be fifty-eight years old with retirement looming near. A baby born this year will then be turning twenty-seven and looking ahead to a long life.
According to the Social Security Administration, in April of 2013 the average retiree received a check of $1,266 each month. Since social security is a pay as you go system, every month $287 was paid into the social security system each month by each one of 4.4 workers and their employer to cover the cost of each retirement check. One half of that amount or $143.50 was deducted from each worker’s monthly pay.
In other words, it cost each worker on average about $33 each week to cover the cost of one retiree.
If instead there had been only 2.7 workers per retiree, the weekly cost would have risen to $54 each week. A worker earning $870.97 per week (or $21.77 per hour) currently has $54 in social security tax withheld from his check each week.
Careful consideration will likely lead one to the conclusion that current or future social security taxes are not as outrageous as some would like you to believe.
