It’s that time of the year again when the Social Security Administration releases its bleak outlook regarding its trust fund’s financial situation. This year, they have further hastened the expected depletion year of trust fund assets to 2033. In layman’s terms, there’s a well of Social Security benefits that will run dry in less than 15 years at its current pace.
For many who have long been in the workforce, the pain of Social Security’s underfunding is tangible with every paycheck. However, for young people emerging into their careers, the reasons to care may be few-and-far-between. Here is a quick list of why young people should still be frustrated with the program’s seeming insolvency:
It comes out of your paycheck
If you’ve never received a formal paycheck from an employer, there are a few pieces that you can expect to see. There will be a mouthwatering figure at the top, only to be exhausted by taxes, health and life benefits, and finally retirement savings.
Taxes will always stink, benefits at least give you something in return, and personal retirement savings can give peace of mind for the future. However, baked within retirement savings lies your mandatory Social Security contribution. It’s a fraction of the pay you’ve earned that, supposedly, the collective effort of the entire workforce of the future will repay at your retirement. Except, if social security is depleted prior to your retirement, you’ll never see that contribution remitted to you.
Your benefits may suffer
Pretend for a second that Social Security trust fund assets make it to your retirement. It’s evident that the current benefit structure is far too expensive for the current workforce to support seeing as it is due for doom in our lifetimes. One of the solutions to this may be to cut benefits prospectively, meaning certain groups’ retirement benefits may be indefinitely reduced, even though they may have contributed the same amount as everyone else during their career.
It’s salvation will require government intervention
The writing already seems be on the wall regarding the future of Social Security—politicians will let it fester for a few more years, then throw a massive fit as if the crisis hasn’t been looming for decades and spend an unholy amount of money to sustain benefits and kick the can down the road. If you’re particularly concerned about inflation in the future or government spending generally, this could be a point of concern.
While it would be a humanitarian boon sustaining benefits, particularly when 89% of American beneficiaries of Social Security identify that monthly check as a significant source of income, the size of the bailout required may prove even more detrimental to those workers already supporting the program.
I know, retirement is not the most interesting topic for young adults. But with the uncertainty of Social Security’s future, it is even more important to start saving for retirement as soon as possible. If the worst case scenario where benefits are cut to oblivion fleshes out in your lifetime, you’ll thank yourself for taking actions now to support your future self regardless of Social Security’s funding.
The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.