This is how to save Social Security

In this election year, we hear many politicians proclaiming their intent to fight to save Social Security. A careful study of their motivation shows that they will fiddle with the program to make it survive in the short-term to prevent alienation of the baby boomer constituency. But long-term survival of the program requires implementation of major structural changes that requires political wisdom and courage.

Population projections show that by 2065, the number of people in the United States over the age of 64 will range between 75 and 90 million. The viability of the Social Security program as presently structured can be ensured if the worker/retiree ratio is four or above.

Current statistical data shows that 75 percent of all adults are employed, with 60 percent of women being employed and 90 percent of men in the same category. Given the current employment rate among adults, the required worker/retiree ratio can be achieved if the number of births in this country is 8.7 to 10.4 million per year, far above the current rate of 4 million per year.

Let’s be realistic. We are not going to sustain a baby boom no matter how severe our electrical blackouts become. Social Security must be restructured from a pay-as-you work plan covering current expenses into a savings plan for the future.

Using the Rule of 72 as a guide, if the stock market indices increase by 12 percent per year, the amount in an indexed stock account will double every six years. If a person is allowed to invest $2,000 of his or her Social Security contribution for seven years starting at the age of 21, that investment will grow to $1.2 million at the age of 65. This is how we will save Social Security.

ROBERT A. DAHLQUIST Orange County, Calif.

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