South Carolina Senate Fact #16: Social Security Is a Bad Deal for Young Workers

U.S. Senate candidate Inez Tenenbaum promised to “protect Social Security…for generations to come.” Unfortunately, this is one promise Tenenbaum won’t be able to keep, because she has no plan to solve the Social Security crisis. And if nothing is done, many young workers will actually pay more into the system than they receive.

A Heritage Foundation analysis of Social Security Board of Trustees data found that 25-year-old males can expect to receive a 0.82 percent annual loss on their Social Security payments. In just fourteen years, the program will run a deficit as benefits paid will exceed contributions as the baby boom generation retires. Young people will eventually face both massive tax hikes and benefit cuts if we stick with Social Security as it is currently structured.

Fortunately, Representative Jim DeMint has a solution to this fiscal train wreck: creating Personal Retirement Accounts (PRAs) that workers own and control. Similar to 401(k)s, Social Security PRAs will grow with the economy and will help avert the retirement security disaster without tax increases or benefit cuts for anyone. What’s more, people just entering the work force can actually expect to receive 130 percent of current benefit levels.

Instead of proposing a viable plan to keep her promise to America’s younger workers, Inez Tenenbaum has resorted to misleading rhetoric by claiming to “protect the Social Security Trust Fund.” The truth is that the “Trust Fund” is full of meaningless government IOUs that will not be able to pay for benefits when Social Security begins to run into the red in 2018.

It’s clear that the DeMint plan to create PRAs is the only path forward that will honor America’s commitments to both its seniors and its youth.

For more information, please visit http://www.freedomworks.org/southcarolina/