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Social Security

Social Security. Vocab. Baby boom-A temporary marked increase in the birth rate, esp. the one following World War II Debt-money that is owed Intergenerational commitment-official act that younger must support older people. Vocab ( Con’t ).

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Social Security

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  1. Social Security

  2. Vocab • Baby boom-A temporary marked increase in the birth rate, esp. the one following World War II • Debt-money that is owed • Intergenerational commitment-official act that younger must support older people

  3. Vocab (Con’t) • Ponzi scheme-fraudulent investing scam promising high rates of return with little risk to investors. • The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. • Social welfare state-federal gov’t provides benefits to “less fortunate” at expense of others. • Personal savings accounts-account where depositors earn a rate of interest in return for having restrictions upon how they can access their money

  4. Why Does It Matter? • If you work, you will pay into it. • Largest unfunded liability of economy. • You will be able to collect when 62, if it still exists

  5. Who and When • Franklin Delano Roosevelt (D) • 32nd President • Signed into law Aug. 14, 1935

  6. What is it? • old age pension for American workers • Pension-fixed payment to a retired person • Over 62, paid in through 10 years • 6.2% payroll tax on workers, employers • $90,000 annual salary, exempted from tax • Idea that today’s workers pay for tomorrow’s retiree’s

  7. Effects of the Baby Boomers • Baby Boomers-born from 1945 to 1966 • Make up largest portion of population-77 million people born • Not enough people working to pay for them. • People live longer today. • Avg. life span: male-82 years, woman-85 years • Compared to 1935: 77 years old for both.

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