How is social security in the US at risk of running out of funding, if every tax payer pays into it?

Question

How is social security in the US at risk of running out of funding, if every tax payer pays into it?

In: 1004

Answer 1

Here’s some math.

The average US social security contributor (including employer contributions) will put about $135k into the system over a 35 year career. (in 2023 dollars)

The average benefit recipient will receive $20k from the system per year. (in 2023 dollars)

Annualized, the total contributions (at 6% interest excluding inflation) are worth about $276k.

Annualized, the total benefit (at 6% interest excluding inflation) is worth $333k.

Contributions < Benefits

Note: Benefits need to be cut by a fifth, or contributions increased by 25% to avoid insolvency.