Half of millennials (people aged 18-29) say in surveys that they don’t think Social Security will exist by the time they reach retirement age. Young people – and the rest of us – are being fed the idea that we can’t rely on each other for our retirement through a social system, we can only rely on ourselves.
The opposite is true.
We can and do rely on government for our retirement. In fact, since its creation in 1935, Social Security has been the only thing seniors could truly rely on, with stock investments, pensions, and nest eggs evaporating left and right. Social Security provides at least two-thirds of the income middle-class and working class retirees live on.
As any fact-based economist will tell you, Social Security can continue to provide its current modest benefits to generations going forward. Since 1984, this largely pay-as-you-go system has amassed a huge trust fund that was intended to help get us through the period when the outsized baby boom generation retires. As a result, Social Security, as currently constructed, is good to go till 2033 and needs only modest tweaking to keep it healthy after that.
Social Security is one of the world’s most efficient bureaucracies – it spends 1% on administrative costs, yet manages to keep almost every senior out of poverty (except workers who are unfortunately excluded from it, like farmworkers). It also acts as an economic stabilizer. In hard times, as jobs disappear and consumer spending plummets, the seniors keep getting, and spending, their small monthly allotments.
Yet many politicians, including President Obama, want to throw Social Security into the maw of deficit reduction. While the program has so far proved too popular and worthy to totally privatize or eliminate, the president proposes to chew away at it by reducing the its cost-of-living increases, biting into the already small checks seniors are getting.