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Social Security's solvency has been the subject of much debate, but clearer heads point toward a graduation of the current system to include higher earners. That will accommodate the large aging population's demand. Case closed, easy peasy lemon squeezy.
Obviously there are solutions. Maybe if America survives that long we might see one implemented.
And if you normalize for longer lifespans, it's perfectly reasonable.
Or just living longer with dementia and stuff?
Theres something so PKD about these fake realities, that have breached any and all containment, that people so readily deny any sense & sensibility. Just because. It's caused such huge disasters already. But it feels like still so many slumber on, that camp Wide Awake suffers so.
Brandolini's Law, the Bullshit Asymmetry Principle lurks below every reality based discussion, waiting for any chance to plunge thr pariticpants through to the unfathomable depths of unreality. It's a bitch of a structural advantage to be able to leave engagement and caring and discussion behind at any point, and plunge into that freezing alien other, to leave reality behind.
Maybe we need two systems:
1. You may move to be a certified responsible saver. You inherit all risk. But you opt out of the taxes. You must prove retirements assets are being contributed to.
2. Mandatory saving for everyone else (reading other countries, seems like this happens elsewhere). Money is pooled and invested into US companies. Investments must produce at least 8% return annually over 10 year rolling period or something, else corporate assets are forfeited (someone more saavy than I needs to figure that policy out).
In Australia, we have a universal, means-tested pension funded through consolidated revenue (i.e taxes). The pension can't "run out", because it is just a law that says that the government will pay you $X after you turn a particular age, if your assets are below a threshold. But if X were too high the Government would need to raise taxes, borrow money or print money to fund it, like all government spending.
Separately, we have superannuation - which I think is similar to 401k except compulsory for employers to pay 12% of your salary into, which are personal retirement savings held in trust to be released at your retirement, but generally these are account-based and in addition to the pension if you are eligible (i.e what you put in is what you get out).
There are older "defined benefits" superannuation funds where payouts aren't account-based (I think based on years of service in government roles or something like that) but they have been phased out to avoid the moral hazard of something government-adjacent having pension liabilities they cannot meet with their member's funds.
So what exactly is Social Security if it can run out? It sounds like a defined-benefits fund that is run by the government - in which case why has nobody closed it off to new members like Australia did when the writing was on the wall?
Where this gets confusing is that most folks seem to have the mental model that Social Security is a pension or some weird retirement account. It is not.
Social Security is simply a pay as you go means tested welfare program. It just means tests in a strange way. If you ended social security taxes today, the trust would run out in a few months and there would be $0 to pay retirees. It's current workers paying for current retirees. Social Security is simply an income tax like any other, but it's separated and marketed the way it is to purposefully make people think it's "their money" and make repealing it politically impossible.
It's just a means tested entitlement program funded by current tax receipts dressed up in fancy marketing.
Taking away "free stuff", especially once people have come to rely on it, is a political nightmare no matter the structure.
I think the first key point is that it isn't defined-benefits, as there are no bucket labeled "Bob Smith's Money" etc. Even in American this is a common misconception. [0]
In addition, there's also no constitutional barrier to the legislature passing a law to alter the benefits whenever they like, though it would be unpopular.
> Can someone explain the legal structures in place in the US that make Social Security "run out"?
It's grown a lot of bells and whistles over time, but at the core it fits its legal name, Old-Age, Survivors, and Disability Insurance. The premiums for coverage are collected as a tax on the working, and the payout conditions involve being alive and unable to properly support yourself. (Above an age-range, you get the benefit of the doubt.) If someone dies healthy and young, they don't get anything, the same way that house-burns-down insurance pays nothing if your house was swept away by a tsunami instead.
The program's surplus (from older demographic shifts) is invested in bonds with the US government, meaning that there's an intra-governmental credit/debt going on, where OASDI/SS is the creditor and government-in-general is the debtor. Most of the "run out" talk refers to a period of time where the invested surplus dwindles due demographic shift.
At that time, the program may need to change to avoid going into debt, with one or both of: (A) Congress passes a law increasing premiums/taxes on current workers; (B) Congress passes a law saying it's OK to pay less than the program did before.
__________
[0] I blame this on deliberate tactics by big-banks and political groups ideologically opposed to the program. Banks are unable to profitably compete by offering an alternative insurance, so instead they set up a false comparison between "your retirement investment account that is 100% in government bonds" versus "your retirement investment account with us, who will let you buy stocks."
More or less, with qualifications and levels of degree.
Eg: Was the Second Malayan Emergency active or "peacetime": https://www.abc.net.au/news/2026-07-12/rifle-company-butterw...
Active service in a recognised danger zone ups the pension rate and expands the health benefits (as does exposure to fallout - they like to medically track anyone touched by atomic testing).
Social Security revenue and expenditures can easily be balanced in theory. But neither party wants to do the right thing--Democrats want to expand entitlements, and increasing the retirement age as originally designed is the opposite of their goal.
Ok
(Edit: I'm not certain either way! But it seems like too great a risk to rely on. And the prognosis seems not great! I have heard for decades needs serious help, and nothing seems to change. More broadly, with a few exceptions, I've seen overwhelmingly obstructionism and destruction of America in lifetime.)
Social Security is almost certainly going to exist in some form. The question is how much retirees will get from it and how that compares to the cost of living.
Excessive cynicism is often dangerous because it converts the mundanely pleasant reality into an enthralling doom and gloom scenario.
Of course, I’m not really saying that everyone in America is going to have a wonderful retirement. But if you’re like the other software engineers on this forum and you’re maxing out your 401k and have a mortgage, you’re almost certainly going to have a pretty enviable retirement.
You may be remembering that it’s been a hotly debated issue since the 80s.
I distinctly remember it being a massive election issue in 2000 between Gore and Bush (the first election I’m old enough to remember in detail). It was the whole “lockbox” vs government funding of private accounts debate.
There was a point where social security went from surplus to deficit in 2010. That wasn’t insolvency though since the federal government owed them for the previous surpluses they borrowed. 2033 is when the federal government no longer has to pay back money to SS and it is truly insolvent.
Governments, when faced with shortfalls in the government pension, will absolutely nationalize your 401k or IRA.
YOU, while attempting to responsibly take care of yourself, will absolutely be a piggybank to be raided. This has happened in numerous countries.
You wouldn't want to be selfish, would you? Sure, you forgo the midlife crisis sports car in favor of the Toyota Corolla you've been driving for years, but that's just tough. Shoulda lived for the now.
Yes, tax rates might go up. You should actually bet on that because tax rates are at a pretty low level historically.
But this concept of nationalizing private bank accounts is pretty extreme.
I don’t think it’s far fetched that 401ks of a certain value start to experience penalties to make up shortfalls. After all, the whole reason they would need to do this is because they failed on the promise of social security. Why not fail on the promise of the 401k?
https://politics.stackexchange.com/questions/20203/why-would...