The problem of Social Security

For Generation X and younger, the idea of social security can be, well, depressing. It's not just because these people don't want to pay taxes, it's because they don't want to pay more taxes.

Remember the baby boomers? Probably your parents or maybe grandparents. These people were born right after the end of World War II. The knowledge that the depression was over and that people could support a family as well as the fact that many soldiers returned home to their wives were both factors that put the boom into the baby boomers generation. The population within this generation exploded higher than the norm.

Why would this be depressing for younger generations? Social security works in a way that allows one person to be supported by several people paying taxes (if you look at it in terms of ratios). This will not be the case when the Baby boomers retire because there will be more of them to support than normal. The ratio will seem like there will be less people to support each retired person.

The irony of it is the system is very likely to change because of this problem. So the people who have to pay for social security are not likely to reap any of the benefits of paying for these older generations.

Believe it or not, we're not telling you this to depress you. This is important to know so you don't assume that social security will be your plan for retirement.