Teaching Tip: PBS NewsHour put out a great 11 minute 20 second video on Social Security, focusing on future problems facing Social Security. This can either be shown in class or assigned. In either case, it should foster a good debate on its soundness and future viability.
In Chapter 16 we look at Social Security. For many individuals, Social Security is the primary source of retirement income. About 95 percent of all Americans are covered by Social Security. As you learned in Chapter 16, the size of your Social Security benefits is determined by (1) the number of years of earnings, (2) the average level of earning, and (3) an adjustment for inflation.
As Social Security made its way into the recent political debate, PBS NewsHour presented an in debth look at Social Security and its problems. When Social Security began over 75 years ago, the average life expectancy was 64 years old. Today the average American lives to be 78, with about 20 of those years spent in retirement. With 52 million Americans relying on Social Security, it is a program is important to us all – one that we all know someone relying on it for their financial well-being.
1 Read through the first sections of Chapter 16 of Personal Finance, Turning Money into Wealth. What are you purchasing with your payroll tax paid to Social Security? How will your benefits be paid for in 40 years?
2 How do you think Social Security will change by the time you retire? Be prepared to discuss this in class.
3 What changes do you think should be made in Social Security to make sure it is in good shape by the time you retire. Be prepared to discuss this in class.