The trustees of the U.S. Social Security program have released their annual report, revealing a worsening solvency outlook. The trust fund is now projected to fall short in late 2032, one year earlier than the 2033 estimate from last year. Without legislative action, benefits would be automatically cut by 22% late in 2032, according to the report.
Mandatory Payroll Tax into a Bankrupt System
Every young working person is currently forced by law to pay 12.4% of their pay—half from the employee and half from the employer—into a system that is effectively bankrupt, argues Star Parker, founder of the Center for Urban Renewal. She contends that voters bear responsibility for allowing this to continue.
Parker writes: “Even if the system was not broken and could pay benefits as promised, it still is a horrible situation.” She emphasizes that Social Security, signed into law in 1935, is the oldest and largest federal program, consuming about 21% of the federal budget—approximately $1.5 trillion annually. Its enactment fundamentally changed the constitutional understanding of the government’s power to tax and spend, paving the way for the modern welfare state, which Parker links to today’s spending and debt crisis.
Personal Retirement Accounts vs. Social Security
The Committee to Unleash Prosperity calculated what the average worker would have accumulated if, instead of paying the payroll tax, they had invested the same funds in a personal retirement account split 60% stocks and 40% bonds over their working life. Using historical returns from 1986 to 2025, the average American worker would have amassed $1,453,726, compared to the $458,532 they would receive under Social Security. For Black workers, the figures are $834,662 versus $261,571; for Hispanic workers, $1,290,310 versus $413,726.
A Proposal for Choice and Freedom
Parker proposes giving Americans a choice: remain in the existing Social Security system or opt out, provided they agree to invest the same percentage of their income into a personal retirement account. She argues that this reform would build wealth, particularly among minority groups. Citing the Federal Reserve Consumer Finance Survey as of 2022, 61.8% of white households had a retirement account, compared to 34.8% of Black households and 27.5% of Hispanic households. Similarly, 65.6% of white households held stock, versus 39.2% of Black and 28.3% of Hispanic households. According to the Census Bureau, as of 2021, 20.4% of white households had a net worth of $1 million, compared to 5.3% of Black households.
Parker concludes: “The answer is more freedom, less government. This is how to fix Social Security.” She urges that the discussion should not be limited to finances but should also address individual freedom, suggesting that the nation’s 250th birthday could be celebrated by restoring that freedom.
