Social Security, IRAs and ordinary savings are mechanisms for determining the size and distribution of that portion.Retirement savings vehicles do little to enlarge the pie but can make it smaller by encouraging retirement at 66 — the minimum age for full Social Security benefits — and earlier.If workers better heeded financial planners’ advice to save more through tax-sheltered accounts, even fewer seniors would be working, the economic pie would be smaller and the burden on younger Americans would be heavier.Since 2005, the ratio of working age Americans to seniors has fallen from 5.1 to 3.6.
If women continue to have fewer babies, that ratio is projected to fall to 2.4 by 2060.Policymakers quietly tax senior benefits to compensate.Fifty percent of workers’ payroll taxes are paid with after income tax funds but for seniors who have prudently saved through IRAs and other vehicles, 85% of social security retirement benefits are taxed.
As the dependency ratio becomes more onerous and seniors expect a larger slice of the pie, pressures build for policymakers to cook up new ways to deprive them of promised benefits.Immigration can help but assimilation costs — such as higher social service and educational costs and the cultural friction that accompanies competition for resources — become more difficult to bear if fewer native-born Americans are in our schools and vying for jobs, especially on the lower rungs of the income ladderWithout enough babies a civilization cannot survive, and that is an issue feminism, all its benefits notwithstanding, has yet to address
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