Why can't Social Security rely on a strict pay-as-you-go financial structure?
A)The current generation of workers is too small to support future retirees
B)A pay-as-you-go financial structure is inherently unstable
C)The current generation of retirees will bankrupt the system before the "baby boom" retires
D)Inflation erodes the value of contributions that must be saved to pay future retirees
E)None of the above

Question

Quizplus · Accepted Answer

A pay-as-you-go system relies on the current generation of workers to pay for the current retirees' benefits. When the working population is smaller relative to the retiree population, as is expected due to demographic shifts like the aging of the "baby boom" generation, the system faces financial strain because there are fewer workers per retiree.

Why Can't Social Security Rely on a Strict Pay-As-You-Go Financial