4 Data-Backed Reasons for Strengthening the Social Security Program for Millennials and Gen Z
Social Security serves as a significant financial safety net for tens of millions of retired Americans.
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In fact, according to recent Social Security data from June 2024, it’s reported that about 72.4 million Americans currently receive a monthly Social Security benefit. With more people reaching retirement age, the number of beneficiaries is slated to increase further.
Meanwhile, the state of the current Social Security system remains in question.
CNBC reported that the current Social Security fund will remain solvent through 2035. After 2035, OASDI trust fund assets will be depleted, and retirees will only be eligible for a maximum of 83% of their full benefit. Unless new legislative action is passed to increase funds in the system through Social Security payroll tax increases — or an increase in the age at which retirees are able to claim benefits — benefits are expected to decrease.
Older generations like baby boomers enjoy the full benefits of the Social Security system now, but will the younger generations be eligible for the same later in life?
There are a number of good reasons to strengthen the Social Security system for millennials and Gen Zers.
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Important Reasons for Strengthening Social Security For Younger Generations
Here are four data-backed reasons for strengthening the Social Security program for Millennials and Gen Z, according to Think Advisor:
Social Security makes up the majority of most retiree’s incomes: Most seniors heavily rely on Social Security benefits. It’s reported that the median share of income from Social Security is 47% at age 72 with 25% of recipients reporting that they get 75% or more of their total income from Social Security. It’s crucial to strengthen the Social Security system so that millennials and Gen Zers have the same financial security when they reach retirement age.
Social Security is designed to keep seniors out of poverty: Social Security was originally created to provide a financial safety net for seniors from the time they retire until the end of life. Those with a lower income between ages 55 to 59 typically claim benefits earlier in life. The current system prevents the need to work into your 70s when it can be more difficult to remain in the workforce, even for those who earn less. Younger generations who currently pay into the Social Security fund should be entitled to the same benefit to ensure their financial security.
The bottom 25% of wage earners see substantial income replacement: By age 72, the median spendable income replacement rate from Social Security benefits is greater than 100% for the bottom 25% of wage earners. Lower-income millennials and members of Gen Z need to have the same level of financial security — regardless of the fact that they earned less throughout their lifetime than others.
Social Security eases the pain of losing a full-time income: Under the current system, you’re eligible to claim 70% of your Social Security benefit for life starting at age 62. Every month you wait past age 62, the higher your Social Security benefit will be. Once you reach age 67, you’re eligible to claim 100% of your Social Security benefit for life.
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This article originally appeared on GOBankingRates.com: 4 Data-Backed Reasons for Strengthening the Social Security Program for Millennials and Gen Z