How is social security in the US at risk of running out of funding, if every tax payer pays into it?
In: 1004
The SS system does not take the money you pay and invest it until it’s time to pay it back to you. They use the money you pay today and give it to the people who are retired today. When you are retired, the money for your SS will come from the people who are working and paying taxes at that time. If the population continues to slow in growth and we continue to limit immigration, there won’t be enough people to pay the FICA taxes to support all the retirees.
The system was designed when there were roughly 7 people working for each person retired. Now, that number is only slightly more than 2 people working for every retiree.
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