Knowledge that Transforms

The future of U.S. Social Security system is examined with consideration given to impact of political forces. The Social Security Administrations projections of future benefit levels are reviewed. The authors then present a theoretical model that postulates first as number of retirees increases relative to number of workers retirees acquire additional political power which can be used to raise individual However at same time cost of increasing individual benefits is greater and this may lead to a lowering of individual benefits. The results suggest that the benefits received by baby-boom generation will be significantly lower than those projected by Social Security Administration. (EXCERPT)