On Aug 14, 1935, President Franklin D. Roosevelt signed the Social Security Act. It was during The Great Depression of the 1930’s that the need for the poor and elderly to live independently was realized. This was a time when millions of Americans could not find work and did not have the money to feed their families. Franklin D. Roosevelt became president in 1932 during the Depression, which was the nation’s worst economic crisis, and proposed an idea of social insurance. This idea basically allowed workers to place a small percentage of their paycheck into a separate account that could be withdrawn upon retirement.
The Social Security Act of 1935 provided for old-age insurance, unemployment insurance, and welfare programs, which were intended …show more content…
However, Congress has modified the amount over the years. In 1937, payroll taxes applied to only the first $3000 in earnings. As of 2011, payroll taxes apply to the first $106,800 in earnings. The Social Security Administration predicts that the Social Security Trust Fund will be depleted by 2033. It is estimated that the degree of uncertainty only increases in the upcoming years. The long term finances for social security do not appear to be positive. The reserves will more than likely run out within 20 years and as a result, benefits will be cut. Some experts suggest that it would be advisable to raise the full retirement age from 65 to 67. This would increase the amount of years that a person would work and pay payroll taxes as well as not receive benefits for those two years.
The Social Security Act has had a positive impact in helping retirees, the disabled, and the unemployed in America. There are problems that need to be overcome for the future of social security such as the reserves being depleted but there are solutions that could be considered to help with these problems. Some solutions are reducing benefits, modifying the tax maximum, raising the retirement age, and possibly raising the tax contribution of both the employee and
The Social Security Act of 1935 provided for old-age insurance, unemployment insurance, and welfare programs, which were intended …show more content…
However, Congress has modified the amount over the years. In 1937, payroll taxes applied to only the first $3000 in earnings. As of 2011, payroll taxes apply to the first $106,800 in earnings. The Social Security Administration predicts that the Social Security Trust Fund will be depleted by 2033. It is estimated that the degree of uncertainty only increases in the upcoming years. The long term finances for social security do not appear to be positive. The reserves will more than likely run out within 20 years and as a result, benefits will be cut. Some experts suggest that it would be advisable to raise the full retirement age from 65 to 67. This would increase the amount of years that a person would work and pay payroll taxes as well as not receive benefits for those two years.
The Social Security Act has had a positive impact in helping retirees, the disabled, and the unemployed in America. There are problems that need to be overcome for the future of social security such as the reserves being depleted but there are solutions that could be considered to help with these problems. Some solutions are reducing benefits, modifying the tax maximum, raising the retirement age, and possibly raising the tax contribution of both the employee and