1. “Finally, beginning in 1949 you and your employer will each pay three cents on each dollar you earn, up to $3,000 a year. That is the most you will ever pay.”
Social Security in Your Old Age,
Social Security Board, 1936

2. Social Security Benefits as a Function of Earnings
0¢/$
$1,865.89
15¢/$
$1,535.44
Social Security Benefits (PIA)
32¢/$
$550.80
90¢/$ $0
$612
$3,689
$5,892 $0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Average Indexed Monthly Earnings (AIME)

3. Social Security in a Two-Period World
Number of young workers
Earnings per young worker
Taxes paid per young worker
Total taxes paid
Number of old retirees
Benefits to old retirees
Taxes paid by old retirees
Rate of return 1
100
$20,000
--- 2
105
$21,000
$2,100
$220,500
100
$2,205 ∞ 3
110
$22,050
$2,205
$242,550
105
$2,310
$2,100
10% 4
115
$23,153
$2,315
$266,225
110
$2,420
$2,205
10% 5
121
$24,310
115
$2,315 -∞

5. Redistribution under Social Security for a Single Male
Earnings Level
Retirees turn 65 in 1960
Retirees turn 65 in 1995
Retirees turn 65 in 2030
Low earner
Average earner
High earner
$26,100
$36,500
$36,800
$12,500
-$5,100
-$37,100
-$4,100
-$56,200
-$248,500

6. SS Spending and Personal Savings
Personal savings as a % of GDP
SS spending as a % of GDP

7. SS Spending and the Elderly Poverty Rate
Poverty rate among Americans over 65
SS spending as a % of GDP

8. SS Spending
Labor Force Participation

9. Retirement Hazard Rate
SS EEA
SS FBA
0.25
0.20
Retirement Hazard Rate
0.15
0.10
0.05 55 60 62 65 70
Age

10. Retirement Hazard Rate
0.20
1960
SS EEA
0.15
SS FBA
0.10
0.05 55 62 65 70
0.20
Age
1970
0.15
0.10
Retirement Hazard Rate
0.05 55 62 65 70
0.20
Age
1980
0.15
0.10
0.05 55 62 65 70
Age

11. 64 63 62
EEA Introduced in 1973
Mean Retirement Age 61 60 59 58
1968
1972
1976
1980
1984
1988
1992
Year

13. Historical OASDI Surplus or Deficit (billions of $)2% 4%
9.6%
11.7% 3% 6%

14. Ratio of Elderly to every 100 People of Working Age

15. “Finally, beginning in 1949 you and your employer will each pay three cents on each dollar you earn, up to $3,000 a year. That is the most you will ever pay.”
Social Security in Your Old Age,
Social Security Board, 1936

16. Redistribution under Social Security for a Single Male
Earnings Level
Retirees turn 65 in 1960
Retirees turn 65 in 1995
Retirees turn 65 in 2030
Low earner
Average earner
High earner
$26,100
$36,500
$36,800
$12,500
-$5,100
-$37,100
-$4,100
-$56,200
-$248,500