Under the most recent revisions to the law, and presumably conservative economic and demographic assumptions, today’s younger workers will be paying social security taxes over their working years that appear sufficient to fund their benefits during retirement. However, the huge liability for current retirees, as well as for much of the work force closer to retirement, leaves the system, as a whole, badly underfunded.
The official unfunded liability for the Old Age, Survivors and Disability funds, which takes into account expected future tax payments and benefits out to the year 2070, has reached a staggering $ trillion. This issue of funding underscores the critical elements in the forthcoming debate on social security reform, because it focusses on the core of any retirement system, private or public.