Actuarial Deficit

Taxes and death, that's all we've got. Even though workers have been paying into the tax system all of their working lives, and Americans have been counting on Social Security to fund their retirement, this is not one of the givens. Only paying taxes, not receiving the benefits.

Social Security is in actuarial deficit when its income from payroll taxes is less than the benefits it pays out to all those hard-working people who made this country what it is today. When payroll taxes are equal to the benefit payouts, the system is in actuarial balance.

The headache of Social Security insolvency can be solved either by increasing the payroll tax or decreasing the benefit. Nothing is certain but death and taxes.