Summary: There is much discussion of the rising cost of Social Security and the declining number of workers to support the Baby Boomers when they retire. How affordable is Social Security projected to be then? A look at several different measures reveals the following:
When the Baby Boomers are retired, the total number of people supported by each worker (including children, retirees and other non-workers) will not be as large as it was when the Baby Boomers were children.
As a share of the total economy, the rise in Social Security costs will not be as large as the rise in spending for public education when the Baby Boomers were children.
By 2030, wages that are subject to Social Security taxes are projected to grow by 33 percent in today’s dollars. In the implausible event that Social Security were to be balanced solely through a tax rate increase — a proposal no one is making — workers’ net wages (after paying the higher tax) would be 26 percent higher than they are today.
These measures suggest that the important question is how Americans will choose to allocate national resources to adapt to an aging population.