Will Social Security Even Exist When I Retire? What Gen Z and Millennials Need to Know
Social security income is the lifeline for many older people to help them retire. However, if you are a millennial or Zer Gen, you may be worried that Social Security won’t exist when you retire. I often hear fear expressed by my clients.
Over the years, we have heard that the government’s plan is Use up all the money. President Donald Trump proposes Plan to reduce social security taxes Can Speed up this timetable. While current retirees may spend more money in the near term, it will put the fund at risk for future generations.
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While this is certainly a problem, as a money coach and author Crush your money goalsI make sure my clients know Social Security Payment It is rare for a person to pay for your retirement expenses. Constance Craig-Mason National Social Security Consultant,agree.
“Financial status is more than just numbers, it’s about stability and peace of mind,” she said. “This uncertainty emphasizes why social security should be considered as the basis, rather than the only pillar of retirement plans.”
No matter what happens to Social Security in the end, you shouldn’t fund it to fund all retirement expenses. Even if you aren’t ready to start saving, it’s the way and steps you can take to work on the Social Security Benefits right now.
Read more: Do you have to pay income tax on social security? Everything you need to know
How does social security income work?
Social Security is a government operating plan we pay through payroll taxes – employees pay 6.2%, employers pay 6.2%, and self-employed people pay all 12.4%.
The amount you pay in the Social Security Payroll Tax is directed to the current beneficiary and not to provide you with a personal savings account. So what you are paying now is the generation before you, you will be investing in the pool of funds based on the next generation.
How much you get from Social Security depends on whether you are single or married, how much money you make Your highest 35 years and your retirement age. Most people can start claiming benefits at the age of 62, but the longer you wait, the more you spend monthly. You can use Social Security Benefit Calculator Estimate what you expect to receive.
Read more: How to register for my social security account and estimate retirement benefits
Will social security exist when retirement?
Yes, social security may occur when you retire. However, you may not be able to get the full benefit of your current retiree. this Social Security Bureau’s 2024 Annual Report It was discovered that the program may be able to pay 100% of current benefits by 2035. After that, retirees will receive 83% of their planned benefits.
What would that look like? As of January 2025, Average Social Security Expenditure It’s $1,976 per month. If you are receiving 83% of what you want, it drops to $1,640 per month.
Is Social Security sufficient to fund your retirement?
Most people count on social security to help them Retirement savings. But no matter how frugal you are, your Social Security expenses alone may not have enough income to sustain your retirement needs. While $1,976 ($1,640 if you retire after 2035) isn’t a trivial amount, that’s not enough to cover the living expenses of any of my clients, and probably not enough.
Social security is a key part of the monthly income of many retirees – but this shouldn’t be your only retirement plan.
Don’t rely solely on social security. Instead do this
I suggest making a plan now to start Increase your own retirement fund. Even if you can’t save too much, a small start is better than pushing it on the road. Here are the pre-order steps I took to help plan my traditional retirement plan and save me enough money to retire in my early 40s.
1. View your options and set up a retirement fund
If you Living salary to paid tickets And work hard to cover your rent, mortgage and other essentials. My first step didn’t require any investment at all. Instead, I encourage you to look at your options and set up an account so you can save when you can contribute.
I also strongly recommend that you talk to people in your life who are retired or near retirement age to see where they are starting.
2. Maximize your employer sponsorship program
If your job Provided 401 (k) Or other retirement plans with the competition, the best option is to contribute to the account until you reach your annual maximum. This is your best choice because your employer will fit some of your contributions, thus helping you make money faster. because Retirement changes in the Safety 2.0 Act, If you work part-time, you are even eligible to contribute to a workplace program, depending on when the program is set up.
My husband and I focus on contributing to our sponsorship program before investing anywhere else. It’s an automatic way to automatically earn extra pensions without much effort. This year, you can contribute $23,500 Enter your 401(k). If you are over 50, you can donate $7,500.
3. Open the IRA next
If you reach a 401(k) maximum contribution, you are aiming to invest in the next single retirement account. The maximum IRA contribution limit for 2025 is $7,000.
Roth or a traditional IRA makes sense depending on your estimated tax rates now and in the future. Both make you tax-free; a Roth IRA allows you to contribute after-tax dollars, while a traditional IRA is funded with pre-tax funds and then taxed when you exit. Too many of my clients have opened a brokerage account instead of an IRA, rather than realizing that they lose their hard money every year.
4. Pay the extra money to your mortgage now
A great way to help your Social Security Income and Pension Fund expand further is to eliminate huge fees. Owning your home completely can get rid of one of your biggest expenses. This sounds like a lofty goal, but it is possible. I’m focusing on paying off the clearance $300,000 in debt, including my home for three years. If you are Get a tax refundwork bonuses or other surprises, pay it to your mortgage if you can. Each point can lower your balance.
5. Reduce your housing costs if possible
If you are willing to relocate, consider places where taxes and housing costs are lower so you can spend more money on your retirement goals. My husband and I made a bold move to leave our hometown of New York City and settle in Charlotte, North Carolina, ten years ago, which was more affordable. We save tens of thousands of dollars in taxes, auto insurance and living expenses every year.
Even if you are not ready for the entire country, considering the lower-cost communities in your area can make a big difference. We also lay off employees in Charlotte and decided to rent them out. The money we will use for home repairs and maintenance frees up extra money for us.
6. Take advantage of health savings accounts
Healthcare is one of the biggest expenses for retirement. So, investing in your health now can save money. Develop the habit of filling tax-promotion accounts, e.g. Flexible spending accounts or Health savings account Helps you save on health expenses. Remember that your employer provides an FSA account, but you can set up your HSA yourself.
In the long run, these accounts can inspire you to use these funds to the healthcare resources you need to preserve healthy habits, because you won’t pay too much healthcare purchases, checks, and procedures from your pocket. You can then use your home paycheck to focus on your retirement plan.
Focus on what you control
We can’t accurately predict what will happen to Social Security, but we can now take action Reduce financial anxiety About the future.
As Dr. Craig-Mason encourages: “When you combine Social Security benefits with smart savings strategies, intentional funding management, and focus on aligning your financial situation with a sense of well-being, you build a sustainable and fulfilling retirement plan – regardless of uncertainty.”
The worst thing you can do? Assume that Social Security will cover everything. Instead, start planning immediately.
