Why Does the Social Security Retirement Program Face Financing Problems?
The financing problem that Social Security will begin facing in the next decade is, in essence, the result of demographic changes that began several decades ago. First, life expectancy began to increase at a faster pace in the late 1960s as rapid progress was made in reducing mortality due to heart disease. Progress in extending life expectancy in this country has continued since then, although with distinct shifts in the rate of that progress. The increase in life expectancy is welcome to all of us, but it does mean that retirees will receive Social Security benefits for longer periods of time as life spans continue to lengthen. The second demographic change affecting Social Security financing was the sharp downturn in fertility that began in the mid-1970s in the U.S. and has now occurred in many countries around the world. The expansion of education and job opportunities for women, combined with the development of reliable birth control, seems to be the leading cause of the decrease
