GEN Z: The issue of Social Security
According to a new survey, roughly 1 in 4 younger Americans believe Social Security won’t be available when they retire. According to Northwestern Mutual’s 2020 Planning & Progress Study, about 23% of Gen Z and 26% of Millennials believe there’s little chance they’ll be able to rely on Social Security to fund their retirement. Those numbers are compared to the 7% of non-retired Baby Boomers who similarly believe it is not at all likely Social Security will be there when they retire.
Since many retirees are living longer, there are more funds being taken out than going in. Starting this year, experts predict that Social Security will need to start going into reserve funds that it’s accumulated over the years to cover benefit payments.
If no changes are made to Social Security funding, the program’s reserves could be exhausted by 2035 or 2036, about 15 years from now. At that point, Social Security would not completely run out of money, but it would only be able to pay out about 75% to 80% of the promised benefits, according to some estimates.
About 30% of Americans surveyed by Northwestern Mutual reported that the economic impact of COVID-19 has shifted their retirement timeline in some way. About 1 in 5 say it’s caused delays. Gen Xers were most likely to report that the effects of the pandemic will likely cause them to push back retirement (25%), followed by Gen Z (22%), Millennials (19%) and Boomers (14%).
Chloe Berg is a Leavenworth native and student at Benedictine College.