Social Security and the National Debt

1. Social Security and the National Debt What costs and trade-offs are we willing to accept to ensure the benefits of income security to Social Security recipients?

2. “Retire No More” Political Cartoon Analysis • Look at the political cartoon, “Retire No More” • Respond to the 5 questions on the handout • Comprehension Check: Class discussion on the message of the cartoon • An IRA and 401(k) are private accounts that people can use to save their own money for retirement. They are like Social Security, but there is an individual risk of losing money. Social Security is insured by the government.

3. Overview of Social Security • Authorized by Social Security Act of 1935 by President Franklin D. Roosevelt • It provides a lifetime of retirement income to people who have paid payroll taxes for at least 10 years. • You must be over 62 or be the surviving spouse or child of someone who would have received benefits. • There are also benefits for people with disabilities

4. Overview of Social Security- The Numbers Not supposed to provide full support 22% of retired married couples and 45% of unmarried retirees report that Social Security makes up 90% of their income 54% of retired married couples and 73% of unmarried retirees report that Social Security makes up 50% of their income 10% of seniors live in poverty Without Social Security it is estimated that 45% would live in poverty • The size of benefit you will get is calculated based on your age when you retire and how much money you have earned and put into the system over your lifetime. • In 2011, the average was 1,181 a month • As of June 2010, over 53 million people collected Social Security

5. Overview of Social Security-Funding • Uses money from today’s workers to pay benefits to current retirees. • Workers pay 6.2% of their monthly income to payroll taxes • Employers match and also contribute 6.2% • Taxes are only collected on the first 108,000 a person earns • This has worked for 60 years and there is usually a surplus

6. Overview of Social Security-changing ratios • Large number of retirees due to baby boom after WWII • 5:1 ratio in 1960 • 3:1 in 2009 • 2.2:1 projected by 2030 • Projected by 2036; Social Security will only be able to pay 75% of expected benefit

7. Overview of Social Security-Options • Shared Responsibility v. Individual Responsibility • Who should be responsible for retirement savings? • Individuals? • Government?

8. Political Cartoons Analyze the two cartoons by yourself. Be ready to share at your table when instructed. • The High Cost of it All • Which one is the Real Entitlement? Work with a partner to complete 5 questions on these two cartoons.

9. Graphs and Charts • Work with a partner to analyze the 5 charts on the costs and benefits of Social Security. • Use the table on your worksheet to take notes. • Respond to the 10 questions about the charts.

10. Exit Task • Ask an adult– Parent, teacher, co-worker, relative, etc. about their views on Social Security • Specifically focus on the costs and benefits

11. Social Security and the National Debt Lesson 1- Day 2

12. Opening Task • Review the current costs and benefits of Social Security. • Make an inference (educated guess using the things you learned yesterday) on how the benefits and costs may change over time.

13. Predictions and Claims • Read the statements by political leaders and commentators on social security • You do not have time to research the truthfulness of the statements • Your task is to determine what additional evidence or questions you would want if you were a reporter covering the issue. • Make a note of your questions and evidence on the chart

14. Discussion • Respond to the three discussion questions on your own paper • Share your responses with your group • Share responses with class