January 1, 1996

Social Security: A Bleak Outlook for Baby Boomers

Download Special Report No. 56

Special Report No. 56

Executive Summary Most members of the baby-boom generation — those people born between 1946 and 1964 — can expect to lose money on Social Security when it is viewed as an investment for retirement. In fact, the negative returns will almost certainly become worse if lawmakers enact traditional reforms to keep the Social Security system from going broke in the year 2029.

Traditional approaches of repairing the solvency of the trust fund include increased payroll taxes, reduced benefits, or postponing the eligible retirement age. Such reforms will make Social Security an even worse deal for baby boomers—and the generations that follow them—because they each have the effect of raising the cost of Social Security benefits. The only productive alternative may be to break with tradition and implement some type of plan which permits taxpayers.

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