Generational Inequities in Social Security Payments

Will Baby Boomers Bankrupt Social Security?:

Count Gen-Xer Tom Firey among those younger workers who think they’re getting the short end of the stick. The managing editor of the conservative Cato Institute magazine, Regulation, first wrote about the subject nearly 10 years ago in a column headlined, “Boomers Fleece Generation X with Social Security.”

“Ever since we Gen-X/Yers began working, we’ve paid 12.4 percent of our earnings to Social Security,” he wrote. “In contrast, the Boomers will get a bargain. When they entered the workforce in the late 1960s, they paid only 6.5 percent of their earnings to Social Security. Only from 1990 on, when the Boomers had earned paychecks for a quarter-century, did they start paying 12.4 percent to Social Security, the same percentage we Gen-X/Yers have paid our whole lives.”

Medicare/Medicaid is even more under-funded than Social Security, yet Medicare holdings are lower. I fully expect a hike in Medicare withholding rates in my lifetime.

P.S. A major inequity that bugs me about Social Security is that millions of people will pay into the systems for decades and die before drawing a penny. It would make sense to me that your payments to these retirement programs would increase as you got older, and therefore more likely to use them.