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One of the major challenges of the Social Security system is the funding sources. However, this is not a new issue. According to Karger & Stoesz (2018), Social Security began to show signs of fiscal trouble in the mid-1970s. Between 1975 and 1981, the OASI fund suffered a significant net decrease in funds and a deficit in the reserve (p. 214). In recent times this has been the same issue. The question of whether or not Social Security will be available to us in the future is one that rings in the minds of young and old (Gustafson, 2019). Gustafson goes on to say, â€œThose of us still in the workforce see Social Security taken from our paychecks, presumably to be available to us when we need it in our old age. Our parents and grandparents may depend on it during their retirement years, which may be upon them now or coming up soon (2019).â€ Therefore, that will leave the working generation of now with no funds to live off of.
In the earlier years Congress passed the Social Security Amendments which delayed the Cost of Living Adjustments (COLAâ€™s), stating in its efforts that if trust funds fall below a certain level, future benefits will be keyed to the consumer price index (CPI) or the average wage increase, whichever is lower (Karger & Stoez, 2018, p. 214). Karger & Stoesz goes on to list three more changes that will allow a solution to the funding issues of the Social Security System, which is as follow:
- Social Security benefits became taxable if taxable income plus Social Security benefits exceeded $25,000 for an individual or $32,000 for a couple;
- change increased the 2027 retirement age to 67 to collect full benefits;
- new federal employees were covered for the first time, as were members of Congress, the president and vice president, federal judges, and employees of nonprofit corporations (2018, p. 214).
In recent years the government has been looking at additional Social Security reform to help with recent issues. According to Gustafson (2019), there are four things that the government are in debate over when it comes to the reform of Social Security. He states the following four items:
- Increase in retirement age so that it could force people to stay in the workplace longer than expected or desired;
- Reduce cost of living adjustment; however this could negatively affects seniorsâ€™ income because out-of-pocket healthcare costs and medications tend to increase at a faster rate than the average cost of living;
- Switch to something called â€˜means testingâ€™ which would reduce benefits for higher income recipients or eliminate them entirely;
- Reform Social Security Disability Insurance (SSDI) benefits which was meant to provide assistance to permanently disabled Americans over the age of 50 but has expanded in both scope and size over time (Gustafson, 2019).
These are some temporary fixes to long term problems.
When one says long term problems with the Social Security system, it has to be recognized that individual organizations has to take the Social Security system into their budgeting every year of its existence for their employees. When looking at the budget social security, Medicare and unemployment benefits are necessary so that if a person retires, become disabled or unemployed they can apply for benefits. One has to account for this even if this is a one man operation meaning self-employment. In an organization it would be hard to predict future benefits with Social Security system when funding in the system is a challenge. Social Security predications are predicated on the belief that certain economic and demographic factors will be in play for the foreseeable future (Karger & Stoesz, 2018). The organization allots for the money to be paid but are not sure if the funds will be available when needed.
So how could an organization account for the gaps in service and the lack of funds? Fundraising is an option and can be very encouraging. Not the fundraising efforts that involves knocking on the door of people asking for help but strategic and planned out fundraising. According to Burnett (2002; as stated by Herzberg, 2015), it is becoming a trend in nonprofits to hire full-time fundraising professionals-also known as development professionals (p.119). The professionals write grants, finds donors, manage the fundraising activities and work with the board of director to make sure all fundraising activities are a success within the company (Herzberg, 2015, p. 119). Fundraising helps raise money so the organizations can help with mission related activities and for non-profits it supports the day-to-day operations, staff salaries and programs (Ozdemir, Altinkemer, De & Ozcelik, 2010; Hager, Rooney & Pollack, 2002; as stated by Herzberg, 2015, p. 114).
Herzberg, J. T. (2015). Foundations in human services practice: A generalist perspective on individual, agency, and community. Upper Saddle River, New Jersey: Pearson.
Gustafson, B. (2019). Social security challenges: Can reform stop the bleeding? Retrieved from https://tritonfinancialgroup.com/social-security-challenges/ (Links to an external site.)
Karger, H. J. & Stoesz , D. (2018). American social welfare policy: A pluralist approach (8th ed). Upper Saddle River, New Jersey: Pearson.