Name: "Something SERIOUS Is About To Hit America..."
Uploaded: 2025-08-23T17:52:16.000Z
Duration: 11 min 51 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

The superlative

If you are in your 20s and 30s and 40s, most likely, you won't be receiving social security benefits even if you have been paying payroll tax your entire life.

Present continuous

Social security trust funds are running out of money, and the vast majority of people most likely will not see the fruits of their labor even though if they have spent decades paying payroll tax.

And the government can't even fix the problem because it's already running a 2 trillion dollar deficit.

Borrowing more money at this point is only going to make the entire situation much worse, so most likely, the government will simply stop paying you social security benefits.

If you think that I am exaggerating, let me explain.

Social security payments consist of a payroll tax that is being paid by you and your employer.

Before your employer offers you the job, they include within your payments that 6.2% must be paid to the government, and that's why you are receiving a lower income that you supposed to receive.

And then you are also paying an extra 6.2%.

Those payments are going into the social security trust funds, and then these trust funds are paying to the retirees their social security benefits.

Because the idea behind it is very simple.

We have a lot of people who are retiring, on the other side, we have a lot of young people.

So the young people today are paying taxes in order to maintain the lifestyle of their retired people.

And then when you get old, the younger generation at that time are going to fund your retirement.

But the system that's supposed to work in theory, isn't working in practice.

The vast majority of income for social security comes from payroll taxes.

And then a small percentage of that comes from total earnings from the investments that they have made.

There are far more people who are paying payroll tax than receiving social security benefits.

So social security trust funds supposed to take that money and invest it somewhere, especially in US treasurer bills.

And they will be receiving interest from those investments.

And over time, they will have far more money than the number of retired people so that when you retire, you will retire very comfortably.

Because social security trust funds will be filled with a lot of great investments.

At least starting from 2014, you can clearly see that social security trust funds are spending far more money than they are earning.

And in 2022 or 2023, the situation got entirely out of control.

Over the last 3 to 5 decades, birth rates all across the globe, including the United States, have been declining, which means that there are far less people who are paying payroll than there were in the past.

And more people are getting old and retiring, which means that less number of people have to sustain a bigger number of people.

And if you have been making bad investments over the last 3 to 5 decades, then you are certainly in trouble.

So starting from 2021, social security trust funds started selling their treasurer bills to maintain the payments.

Because social security payments are mandatory by the government, and if you can't be making payments, then you have to take your treasurer bills that you have in your balance sheet and then you start selling them in the open market so that you can continue making these payments to the retirees.

Currently, social security trust funds have about 2.8 trillion dollars or maybe even 2.6 trillion dollars in treasurer bills.

And we can do the math when exactly social security trust funds will run out of money.

When they sell all of them in the open market, where are they getting the money from?

Because you can't suddenly increase birth rates.

And even if you suddenly increase the birth rates and the number of people, you need time, at least maybe 20 years for these people to grow up, go to college, go to school, get some education, get some real skills and start working and pay much more payroll tax.

And if we knew how to fix that problem, the US wouldn't have a demographic problem right now.

Even though the United States is far away from other countries such as the UK or Germany or France that have far worse demographic problems than probably any other countries.

And probably at the bottom of it is China.

Social security benefits are often being indexed at the national average wage.

Every single year, the payments that they receive are being increased slightly because we have something called inflation and prices rise.

And if you don't increase their payments, then at some point, those social security benefits will be worth absolutely nothing.

Social security benefits must be indexed, it's a mandatory thing by the government, so they will continue year by year, depends on the inflation.

And because we have high inflation over the last couple of years, you can see why we are actually running a problem.

On the other side, if social security benefits or incomes from payroll tax aren't increasing, then over time, you will find yourself in a situation when you are spending far more than you are earning, so it's not difficult to imagine why social security is going out of  We have average income and we have the median income.

Over the last 5 years, the US economy has grown tremendously by at least probably 20%, but not everybody saw their wages increase.

It's one thing when you grow an economy by improving the productivity, and it's a completely different thing when you grow the economy by printing so much money, which is exactly what the United States did over the last 5 years.

So because we have caused so much inflation, the real wages have actually gone down.

The only people who saw their wages grow are high earners, while the low earners didn't see much their earnings to grow.

The real hourly wage has decreased by about 1.1 percent over the last 4 to 5 years because of high inflation.

The payroll tax is being capped at around 160 thousand dollars.

So if you are making 260 thousand dollars, you don't pay payroll tax on 260 thousand dollars, you pay payroll tax on 160 thousand dollars.

Even though that wages across the country have increased over the last 5 years, the payroll tax hasn't increased much because most of those earnings are being made by the high earners and payroll tax is being capped at 160 thousand dollars.

So everybody, so the vast majority of people who make less than 160 thousand dollars didn't see their wages grow that much, which means that payroll taxes haven't increased much.

On the other side, the overall wages in the economy has grown.

So social security trust funds have to adjust their payments anyway because that is what the law says.

It is mandatory to index their benefits based on their national average wage.

So the payments on the social security on one side have increased, but the incomes haven't increased much, which created this problem.

And now starting from now onwards, as we are entering this age of high inflation, we are not entering, we are already in the age of high inflation.

Every single year, we have to keep increasing the social security benefits.

But if the vast majority of low earners who are making less than 160 thousand dollars won't see their incomes grow, they won't be paying more payroll tax, which means that social security will be receiving even less money but will continue increasing the social security benefits, which will actually make it run out of money pretty soon.

The real question is that what is the solution?

Most likely, they will raise the retirement age to 69 or 71.

They have already increased the retirement age multiple times, and the retirement age is very different all across the globe.

So they can make a simple case that the US population lives far longer than when the social security was created, so it's normal to increase the average retirement age.

So if you increase the number of retirement age, people will be working far longer and paying far longer payroll tax than receiving social security benefits.

Now another option is to increase the payroll tax.

That is a real possibility, but honestly, I don't see that happening because increasing payroll tax is unpopular.

You could have taken that money and invested that money wisely.

You did not do that, and now you want us to pay even more?

Maybe you can raise the retirement age, but not the payroll tax.

The final solution is of course cut the number of people who receive social security benefits.

Just like they did with the big beautiful bill, they cut the number of people who can receive medicare, they can do something very similar to that to social security payments.

So there is a very good chance that probably 10, 20, 30 percent of the population who've been paying social security payments won't be receiving social security benefits by the time they retire, and I am talking about the next 5 to 7 years, leave alone for the people who are now in their 20s and 30s and they will retire maybe in 20 or 30 years.

The point of social security was that, you pay taxes, the government takes good care of your money, and then when you retire, it will be paying off that money because the government knows how to invest that money far better than you invest.

But in reality, if we do the math, that is absolutely wrong.

Let's say instead of paying social security, just a hypothetical scenario, you would take that money and you will invest it in the S&P 500.

So the median household income in the US is about 80 thousand dollars.

If we take the total payroll tax, that's 12.4 percent, that's again between you and your employer.

Your employer is paying you a slightly lower income because it has to pay so much taxes on behalf of you, so your real income is supposed to be higher.

So if we take 12.4 percent that is paid to the government, that's about 12,333 dollars.

If this money is being invested in the most safest investment possible, the S&P 500, and we are going to be very moderate, we are going to expect an 8 percent rate of return annually.

Over the course of 40 years, you will be investing into that S&P 500 a little less than half a million dollars or 493 thousand dollars.

But at the end of the road, it will grow to 3.2 million dollars, earning you an extra 2.7 million dollars.

I don't know what's going to happen to social security in 5 to 7 years.

From now, ideally, they should abolish it and let people invest on their own.

But at least you know that you should be investing on your own, your money, because you can make far better investments.

So every single American has the potential to retire as a millionaire even if he is making the average or the median income.

But he is not because the government believes that they can invest your money far better than you do.

That's why it is probably the best thing for you is to take care of yourself and start investing your money instead of letting the government to do so.

Of course, you can avoid paying payroll you still have to do that.

But even if you start investing even a small amount of money, such as 200 dollars per month or 300 dollars per month, you can still end up retiring with at least a million dollars by the time you retire.