Discussions around the sustainability of the social security system are again on the rise after the US Treasury's $40 trillion breakthrough this month. Foreign media commented that as the baby boom generation moved into retirement, spending on social security and health care was pushing federal fiscal pressure faster and the current system was increasing the burden on young workers.
2032 or touch key points
The Budget Office of the United States Congress had previously projected that between 2023 and 2033, social security and health coverage would account for 81 per cent of the increase in compulsory expenditure. In 2026 alone, spending on social and health insurance increased by nearly half of the increase in compulsory expenditure.
At the same time, interest expenditure on debt has risen. The Congressional Budget Office projects that the federal net interest cost will exceed $1 trillion in 2026 and rise to $2.1 trillion in 2036.
According to the United States Social Security Trustee 2026, the Old Age and Survivors ' Insurance Trust is expected to run out in the fourth quarter of 2032. If Congress had not taken action by then, the continuing inflow of project income would cover only 78 per cent of the established retirement benefits. The Social Security Trust Fund is expected to run out by 2034, when the combined calibre is estimated at 83 per cent.
The current system relies on contributions from the working population
The United States Social Security has adopted the “pay-as-you-go” model, and the current wage tax is mainly used to cover the benefits of current retirees. In accordance with the current rules, employees and employers paid social security contributions at 6.2 per cent of their wages in 2026, up to a taxable ceiling of US$ 18.45 million, while self-employed persons assumed a total tax rate of 12.4 per cent.
This structure works more smoothly when the working population is relatively adequate, but when population ageing accelerates, the balance of payments pressure increases markedly. The article quotes data that a worker who retired in 2027 at the median wage level is expected to receive a life-long social security benefit of approximately $730,000, while his contribution and that of his employer together is less than $200,000.
If only direct personal contributions are counted, the lifetime benefit is approximately 265 per cent of the individual ' s accumulated contributions. According to this article, the current system still relies to a large extent on today ' s workers to provide financial support to retirement groups.
Quota programme targeting high-income retirees
One of the options proposed by the Responsible Federal Budget Commission of the United States is to cap benefits for the highest-income retirees. The programme, known as the “six-digit ceiling”, proposes to set the annual social security benefit ceiling for both spouses at the normal retirement age at $100,000 and for single retirees at $50,000, adjusted for marital status and age of receipt.
According to the article, the programme had little impact in the early stages. The agency estimates that only about 0.05 per cent of couples will be affected at an early stage, mainly by groups with annual retirement income of over $2.5 million and net assets of over $65 million. However, as the maximum benefits of social security continue to rise, the scope of this restriction may be progressively expanded.
There's not even transfer of wealth.
The article also mentioned that while the baby boom generation collectively holds approximately $93 trillion in wealth, only about $36 trillion is expected to be transferred to the Millennium and X generations in the next 20 years. The rest is consumed by tax, debt and retirement expenditures, and wealth is more concentrated in high net worth households.
According to the review, US social security was initially targeted at social security, rather than income review-based benefits. As a result, those with higher professional incomes are still generally entitled to higher benefits in the formula, even if this portion of income is not high in their total wealth. The article argues that policymakers should revisit institutional goals, focus more on safeguarding the risk of poverty in old age and release more savings space for young workers.