00:10This is a story about a young man who shares a dilemma with millions of young Americans.
00:16It's not, where's my cell phone? It's his paycheck. He's buried in student loan debt,
00:22living at grandma's, forcing him to get creative with his online dating accounts,
00:27and dismayed at the Social Security deductions from his meager salary.
00:31And he's wondering,
00:33Is there going to be anything left from Social Security when I finally retire?
00:37Many young people fear the Social Security system will run out of money.
00:42In fact, half of all millennials believe Social Security will have dried up by the time they retire.
00:48But Social Security is one of the most beloved and effective social programs.
00:52And it's also called the third rail of American politics.
00:56Because when politicians attempt to touch it, they face strong political blowback.
01:01But that doesn't answer the question.
01:03Where's my money going anyway?
01:08Well, maybe that answers it.
01:10How did this all get started anyways?
01:13Glad you asked. I bet someone knows the answer.
01:19Social Security was created in 1935 by Franklin Delano Roosevelt in the wake of the Great Depression,
01:25when poverty rates among seniors were at 50%.
01:29We have tried to frame a law which will give some measure of protection to the average citizen and to
01:37his family
01:38against the loss of a job and against poverty-stricken old age.
01:43And there's more you need to know.
01:45Social Security is essentially a pay-it-forward system as well.
01:48Meaning, instead of paying something back, you are paying it forward to another person.
01:53I don't get it.
01:54I don't get it.
01:55Consider this.
01:57Holding doors for your elders is really important, right?
02:00They deserve it.
02:01They've been through a lot.
02:03Well, paying Social Security is holding the retirement door open for them.
02:08And it will all come around.
02:10Because in 30 years when you need a hand, your kids will be there to hold the door open for
02:14you.
02:14And the cycle continues.
02:16Door after door.
02:18Social Security check after Social Security check.
02:21But that doesn't mean the Social Security system doesn't change.
02:25In 1983, the Social Security system was facing an imminent shortfall.
02:29To address that shortfall, a series of reforms were introduced.
02:32As a result, the system has accumulated $2.8 trillion in reserves that the baby boomers have paid into Social
02:38Security
02:39in order to fund their own retirement.
02:42So, what's the problem?
02:44Why do I keep hearing that Social Security is going bankrupt?
02:48Why is everybody worried about retirement?
02:51Because the baby boomer reserves are going to run out.
02:54Of course, new generations are still paying into the system.
02:58And today, the system has about 85% of the money it needs to pay benefits over the next 75
03:02years.
03:03But Gen Xers and Millennials are accumulating student debt at much higher levels than baby boomers did.
03:08Moreover, traditional employer pensions have been disappearing in recent decades.
03:13And that makes it much harder to save for retirement.
03:16What is the government doing to solve this?
03:19Well, that's not entirely clear.
03:20And that's part of the problem.
03:22And some feel it might not even be the government's job to solve.
03:26Democrats tend to support expanding Social Security benefits to make up for the decline in traditional pensions.
03:33And either payroll contributions need to be increased, for example, by increasing the payroll rate from 6.2% to
03:397.2%,
03:40or the cap needs to be increased from $118,500 to a higher level, or benefits need to be cut.
03:46Most Democrats favor scrapping the cap altogether so that everyone pays Social Security contributions on all of their income.
03:53And of course, not everyone agrees on what to do.
03:56Many Republicans favor partial privatization of Social Security.
04:00In other words, taking a portion of your contributions and putting them into private accounts so that individuals can invest
04:06that money
04:06and have control over their retirement savings.
04:10I know, that's a lot to take in.
04:12But it seems that both sides at least agree that something needs to be done.
04:17So after learning all of this, what's our takeaway?
04:20What would I tell my younger self?
04:22There's no need to panic.
04:24If we make smart decisions and implement some of these reforms,
04:28we can ensure that Social Security will survive for generations.
04:41We can't immediately perform no more.
04:56Oof.
