Some people may not understand how Social Security works. As we work and pay taxes into Social Security, some people may believe they are paying for their own Social Security benefits down the road should they become disabled, or when they retire. This would seem to make sense since a person’s monthly benefit, whether they receive disability or retirement funds, are based on what their salary was while they were working, but the disabled and retirees are not collecting benefits on the money they paid into the system.
Anyone who receives benefits today is collecting benefits on the amount current workers in the system are paying into Social Security. This same beneficiary’s Social Security taxes provided benefits to an earlier generation of Americans and that is how the system works. Current workers pay for current beneficiaries and when that worker retires, and collects benefits, the money collected will be provided by someone else’s Social Security taxes.
The system relies on new workers replacing retired ones to pay taxes and keep the system running. When the number of collectors increases and the number of payers decrease, Social Security trust funds become depleted and this is why Social Security is facing a shortfall in less than 20 years. Because the largest of all generations, the Baby Boomers, are now reaching retirement age, Social Security is going to lack the resources to meet 100 percent of benefit obligations. There are not enough workers who pay into Social Security to keep the current system funded past 2034. Considering this factor, it would be important that America have as many workers as possible pay into Social Security, but President Donald Trump’s current immigration policy only hinders bringing more workers into the system that pay Social Security taxes.
As reported by news site Vox, both legal and illegal immigrants are needed to improve Social Security’s outlook because more tax dollars are needed. The report sited Social Security’s 2018 trustees report indicating that both legal and illegal immigrants pay billions of dollars each year into Social Security. By limiting immigration and reducing the number of immigrants who are allowed to work in the United States, we are actually shortening the amount of time it will take before Social Security is unable meet 100 percent of its obligations.
