If you're not an undocumented immigrant, the child of an undocumented immigrant, or the spouse of an undocumented immigrant, you might have tuned out the immigration debate. But it's time to tune in -- that is, if you plan to collect Social Security when you retire. The link between immigration and not spending your golden years in poverty has to do with how America’s government-run retirement system is funded. Social Security isn’t a retirement savings plan -- rather it’s “an inter-generational transfer of wealth,” according to the Pew Research Center. That’s because, as Pew puts it, “The benefits received by today’s retirees are funded by the taxes paid by today’s workers; when those workers retire, their benefits will be paid for by the next generation of workers’ taxes.” …show more content…
Ronald Lee, professor of economics and demography at the University of California-Berkeley told me by phone. When Social Security started cutting checks back in 1940, 16 workers supported every retiree. Now, that ration has narrowed, to about three workers for every retiree. The result is “more money flowing out to pay benefits than is flowing in in payroll taxes,” Lee explained. That gap is made up by drawing down on the Social Security trust fund which estimates suggest will be exhausted around 2032. “Immigrants are mostly young, working-age people who come in, get jobs and pay payroll taxes,” Lee said. He stressed that while increased immigration would ease some of the strain on the system, it would come nowhere close to completely curing what ails Social Security. “There’s no magic bullet,” Lee said, predicting that shoring up our nation’s retirement system over the long run may require tax increases and benefit cuts as