Problems with Social Security


Social security refers to an insurance scheme meant to cover people against social risks. It covers people confronted with conditions such as poverty, aging, disability and unemployment among others. This paper seeks to discuss the problems associated with social security. The paper will look into the major problems that that are affecting the social security scheme.

Problems with Social Security

The basis of social security which requires finances for supporting the services that are supposed to be offered is also the source of problems for the scheme. The principle of social security fund as was established in the United States in the year 1936 was to offer an opportunity for individuals to make savings through social security schemes and get back the contributions at a later time when the individuals are not able to work.

The inability to work was initially identified as either due to old age after retirement or as a result of disability. In this approach, social security was a self funded scheme. This has been the assumed state of operation of social security though fears have been raised that there may be problems that threaten the sustainability of social security. Specific concerns have been made with experts estimating that the social security fund will be bankrupt in about three decade’s time (Parker 1).

Aging Population

One of the problems that are facing social security is the shortage of funds that is realized from the fact that the program is paying out more money than it is receiving. This means that the program is gradually reducing its capacity to shield the public from the conditions that the program was meant to protect them from.

Though a trend into this effect had been forecasted and was predicted to be realized at least in the next few decades the economic instability that was realized towards the year 2010 changed the conditions and shortage of funds is currently being realized in the program.

The reduced liquidity of the program has been due to the fact that contributions have been to the decrease, a fact that has been realized due to aging population that is being realized in America as well as the increased level of unemployment that was realized along with the economic melt down of the year 2009. Consequently, increased number of people has been applying for benefits while contributions are decreasing (Parker 1).

The number of elder people in America has also been growing and is still expected to grow. This population was realized to be about thirteen percent in the year 2009 and is expected to increase to almost twenty percent in the next two decades. This percentage increase will mean increased number of dependents on the program and reduced number of contributors towards the same causing the problem of shortage of funds (AOA 1).

Baby boomers

Another problem that has been identified with the social security is the baby boomers factor. The baby boomers form the bulk of the American population and have been the main funders of the program. As they grow towards retirement age, the generation X which has fewer people will be the ones to finance the program for the boomers’ benefits. The higher number of the boomers will then explode the threat of shortage of funds (Socialsecurity 1).


The problems with social security is attached to its financial instability that it is likely to face as the trend shows that there is a likelihood of increased expenditure and decreased revenue. Aging population is the main factor to the problems.

Works Cited

AOA. Aging statistics. AOA, 2010. Web. June 30, 2011.

Parker, Tim. Top three challenges facing social security. Financialedge, 2011. Web. June 30, 2011.

Socialsecurity. Social security problems. Social Security Reform, n.d. Web. June 30, 2011.