Problem is that everyone else’s kids pay for your retirement, which means that your incentive to do the work of raising kids goes away; Social Security puts the load on people who have kids to turn them into the next generation of productive workers. It’s great if you never raise kids, but it’s a pretty raw deal if you do raise kids.
I think it more closely follows social insurance than simply asking for a handout from everyone else’s kids. Afterall, you are paying into it until you are eligible, and when you are eligible, a person just one year younger than you is supporting you. Saying that it’s just “kids” paying into it makes it seem like we all stop paying into Social Security when we turn 25. I agree that the onus falls to the next generation in so much that it is their burden to pay into, but making it seem like we are forcing them into baby farms to push out kids to pay for our retirement is a bit dramatic. The population would have to take a pretty drastic nosedive over one generation to cause the system to collapse for the current retired generation, and the population numbers of the US don’t support that line of logic.
The biggest issue that we are running into with Social Security is the Wage Base Limit that stops the payment of Social Security tax after you are taxed a certain amount. It adjusts for inflation each year, which is great, but it doesn’t adjust for the disparity in wealth. Sure, the average person makes a certain amount per year, but that average doesn’t mean anything anymore when it’s the smallest percentage of earners in America. There are too many that don’t pay up to the cap due to their low wage, and too many that make more than the cap and don’t pay any more, and so we are left with a shrinking bank of fund as the wealth disparity increases each year. If we want to fix Social Security, we don’t need to set up “generation funds”, we need to abolish the Wage Base Limit and force everyone to pay in the 6.8% they owe, instead of just relying on the bottom 60% of Americans to do what they can.
As far as 401(k) goes, those are dependant on a volatile market, and often struggle to meet inflation, making them just slightly better than hiding your money in a mattress, but if you hide it in your mattress you don’t have to pay a fee if there is a medical emergency you needs the funds for. 401(k) is great for people with true disposable income in the excess of thousands a month, but there aren’t enough of those people around anymore, and they aren’t the ones that will rely on Social Security, anyway.
PugJesus