Social Security celebrates its 80th birthday on Friday. Whether you're celebrating or lamenting the milestone, here are eight graphs on the country's biggest entitlement program.
Social Security is swallowing ever-larger portions of the federal budget. By 1965, when President Johnson was signing his Great Society legislation, Social Security took up less than 15 cents of every federal dollar spent. Soon, the program will take up more than a quarter of every federal dollar.
Trust fund reserves
Reserves in Social Security's retirement trust fund peaked in 2011. Left unreformed, the trust fund will run out of money in 2035 and only be able to pay out as much as it takes in. At that point, recipients' benefits will be cut by 25 percent as the program starts paying out only what it takes in each year.
It's not too late to save Social Security's retirement program. In 1983, trust fund reserves bottomed out at 14 percent of expenditures before steadily rising toward the 2011 peak.
If left unreformed, Social Security's deficit will only get worse in the coming decades. The program ran a surplus from 1984 to 2009, but has run a deficit since then and is never projected to recover. By 2065, the deficit will have tripled from current levels.
With the deficit set to rise, you might think the payroll tax rate is historically low. To the contrary, it's never been higher than it is now. The rate first rose to a record-high 12.4 percent in 1990 and has stood there ever since, except for a two year temporary cut. Back when the program started, workers only lost 2 percent of their salary to payroll taxes.
Poverty by age
The goal of the program is to ensure the elderly aren't living in poverty. But what about the age group with the highest level of poverty, 18 to 24-year-olds? Those just at the start of retirement, aged 65 to 74, have the lowest level of poverty, at 8 percent. Those over the age of 75 experience slightly higher rates of poverty, at 11 percent, but still well lower than the almost one in five rate of 18 to 24-year-olds.
Penicillin was only 6 years old when Social Security became law. Since then, incredible advances in medical technology have expanded longevity. In 1930, someone who was age 65 was only expected to live to age 77. As of 2010, a 65-year-old is expected to live until age 84. Despite all the medical progress, Social Security's retirement age has mostly been inflexible. Those retiring in 2010 had to be 66 years or older, rather than the historical 65.
Old age population
With all those people living longer, someone has to pay for their benefits. However, more and more people are living deep into Social Security, collecting benefits for 20 years or more. In 1940, only 3 out of 1,000 people lived to be 85 or older. Today, more than six times as many people live that long. By 2050, almost 43 out of every 1,000 people in the country will be 85 or older.
Number of beneficiaries
With the growing elderly population, there are fewer and fewer workers to support each Social Security recipient. The ratio of workers to Social Security beneficiaries continues to shrink. For the past 50 years, fewer than four workers have supported each beneficiary. At the close of World War II, there were 42 workers per beneficiary. Now, just 2.8 workers support each Social Security beneficiary, and the number will shrink further.
Forty-five years ago, a little more than 10 percent of the population was on Social Security. Now, over 15 percent of the population is on the program, and the number is expected to rise as the Baby Boomers continue to retire.