The Truth About Social Security Sustainability—and the Risk of Depending on It for Retirement

If you were paying attention in your high school American History class in high school, you might remember that we have Franklin Delano Roosevelt to thank for Social Security. Before him, most social assistance programs were dependent on the government or charities. FDR “proposed a program in which people contributed to their own future economic security by contributing a portion of their work income through payroll tax deductions” (History.com Editors, 2018). In other words, those working today pay for the monthly allowance of those currently retired. He signed the law in 1935.

It had only been 22 years when it started to become clear that the program may not be financially sustainable. Despite numerous amendments aimed at bolstering its reserves, Social Security has struggled to maintain long-term solvency. Medicare, introduced in 1965 under Lyndon B. Johnson and funded through the same mechanism, faces similar challenges.

While recent estimates suggest the fund might last until around 2035 (a slight improvement from earlier projections), the fundamental problem remains: how long can we keep pushing back the inevitable?

The core issue is demographic. The massive baby boomer generation is now entering retirement, drawing significantly from the system. Subsequent generations, being smaller, are contributing less. This imbalance creates a growing gap between incoming revenue and outgoing benefits. The average Social Security benefit in January 2025 was $1,976, often barely enough to cover basic living expenses in most US cities.

A pyramidal age distribution, where there are significantly more younger people contributing to Social Security than older people drawing benefits, was historically beneficial and contributed to the system's initial viability.

75.7 million Baby Boomers are set to retire utilizing Social Security funds contributed by only 61.9 Gen-Xers while 67.9 Millennials are set to retire utilizing Social Security funds contributed by only 64.5 Gen-Zers.

Each year, there are more Social Security recipients.

This problem is compounded by declining fertility rates and increasing life expectancy, further straining the system. As USAFacts points out, "As the number of older Americans continues to outpace the number of young Americans, Social Security becomes less financially sustainable."

Beyond demographics, Dr. Robert Lustig, in his book The Hacking of the American Mind, highlights another critical, and often overlooked, factor: the health of the contributing workforce. He argues that a healthy Social Security system relies on a large base of healthy young workers paying into the system, with a smaller number of older, less healthy individuals drawing benefits. Historically, as Lustig suggests, premature mortality (e.g., from smoking-related illnesses) may have inadvertently benefited the system by reducing the payout period for some retirees.

However, the modern landscape is drastically different. Chronic diseases like diabetes, heart disease, and fatty liver disease, instead of leading to rapid death, can cause decades of disability and require substantial medical care. These conditions often affect younger individuals, potentially reducing their ability to contribute fully to Social Security while simultaneously increasing their likelihood of needing disability benefits. This shift from acute, often fatal, illnesses to chronic, debilitating conditions creates a significant financial burden on the system, as it now faces the prospect of supporting not just retirees, but also a growing number of younger, chronically ill individuals.

The confluence of these factors – demographic shifts, declining fertility rates, increasing longevity, and a less healthy contributing workforce – creates a perfect storm for Social Security.

While Social Security will likely remain a part of the retirement landscape, relying solely on it for a comfortable retirement is becoming increasingly risky for many. Several factors, including demographic shifts and the program's long-term funding challenges, raise concerns about the future level of benefits and their ability to keep pace with rising living expenses. Therefore, a critical component of ensuring a secure retirement is personal savings and investment. By strategically investing and growing your existing assets, you can create an additional income stream that will supplement Social Security and provide a more robust financial foundation for your retirement years.

SOURCES

History.com Editors. (2018, January 26). Social Security Act. History.com. Retrieved February 14, 2025, from https://www.history.com/topics/great-depression/social-security-act

Lustig, R. H. (2017). The hacking of the American mind: The Science Behind the Corporate Takeover of Our Bodies and Brains. Penguin.

Mohammed, O. (2023, December 27). Americans believe social security is unsustainable. Newsweek. https://www.newsweek.com/americans-believe-social-security-unsustainable-1855899

USAFacts. (2024, August 1). Is social security sustainable? USAFacts. https://usafacts.org/articles/is-social-security-sustainable/

What is the average monthly benefit for a retired worker? (2025, January 2). Frequently Asked Questions

| SSA. https://www.ssa.gov/faqs/en/questions/KA-01903.html#:~:text=The%20estimated%20average%20amount%20changes,most%20convenient%20way%20to%20apply