A Simple Solution to America's Social Security Problem

TL;DR - Legalize all illegal immigrants and have an open immigration policy that makes up for the shortfall in the workforce.

Long version

The way Social Security works is, every dollar you pay in taxes today, goes to paying the check for a retiree.

To get a full appreciation for the Social Security Problem, let’s run some quick math.

Let’s assume that each Baby Boomer is retiring at the age of 65. Also assume that each retiree lives for 30 years after retirement.

Also assume that each retiree is expecting to get $45K/year - which is likely to be VERY conservative, but, for simplicity’s sake let’s just use $45K/year.

Each retiree would have to be paid $45K * 30 years = $1.35M during retirement (let’s round it up to $1.5M to make it easier on the math).

Also assume that there is a gap of about 30 million people, meaning there are 30 million more people retiring (i.e. baby boomers) than there are replacing them (i.e. young people entering the work force for the first time) - and the gap could be wider, but for math’s sake, let’s go with that.

That means, it’s: 30,000,000 people * $1.5M = $45,000,000,000,000 (i.e. $30 Trillion)

This ignores the health care related expenses for those retirees. This is a major problem, and this is what people mean when they say that Social Security is ‘unfunded’. i.e. there is a chunk of retirees that have no one just entering the workforce that will support them.

Solution: Expand the workforce to be greater than the number of retirees. i.e. Legalize all the illegal immigrants and open the gates so anyone can come and work in America….up to a comfortable number over and above the number of retirees. 

Obviously, I know there are political consequences to making a move like this and other repercussions, but if America’s leaders were honest enough about this solution they would start having this debate and figuring out how to solve it properly. This solution would also have to be done in tandem with other things like raising the retirement age, migrating from Defined Benefits to Defined Contribution, etc. But, by far, this solution would take care of the major driver of the problem - that more people are retiring than entering the workforce. 

It really is that simple.

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