Yahoo Finance 4 Ways Gen Z Is Already Planning for Zero Social Security Checks
The oldest members of Gen Z won’t qualify for Social Security for another 35 years or so, and a lot can happen between now and then. Although most financial experts say Social Security isn’t going anywhere anytime soon, nearly half of Gen Zers (45%) believe they “will not get a dime” of the benefits they have earned, according to a recent survey from the Nationwide Retirement Institute.
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These kinds of worries are nothing new; people have fretted over the future of Social Security almost as long as the program has been around. But concerns have intensified in recent years because of a looming funding shortfall tied to the program’s Old Age and Survivors Insurance (OASI) Trust Fund. The fund is expected to run out of money in a decade. When it does, Social Security will have to rely solely on payroll taxes, which pay about 77% of current benefits.
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Adding to the stress are dire predictions about the future of Social Security coming from 2024 presidential candidates. Over the summer, GOP candidate Chris Christie raised alarms by claiming that “in 11 years, Social Security will be bankrupt.”
Those comments were likely in reference to the OASI funding shortfall. Christie missed the mark in terms of what’s actually happening — although the trust fund will run out of money, Social Security won’t go “bankrupt” because payroll taxes will still fund more than three-quarters of the program.
Even so, Christie’s comments, combined with his proposals to cut Social Security benefits, rattled the nerves of more than a few Americans. Christie and fellow Republican candidates Nikki Haley have also proposed raising the full retirement age for future generations.
Regardless of what lawmakers eventually do, many Gen Zers have already moved beyond the idea that Social Security will serve as a financial cushion in retirement.
“The idea of relying on Social Security feels like a gamble,” Palmer Careen, a 25-year-old recent graduate from the University of Chicago, told Newsweek in an interview. “I’m focusing on my savings and investment plans instead.”
A similar take was offered by 23-year-old University of Illinois student Austin Scarpelli, who told Newsweek he is “already resigned to the fact that Social Security might not be there for us. Hearing about raising the retirement age just adds to my worries.”
With many Gen Zers convinced they will get zero benefits from Social Security when they retire, their focus now is on alternative retirement strategies. Here are the ways they are planning for retirement, according to an October survey from Charles Schwab:
Take a proactive investing approach by seeking out investment opportunities.
Consult with professional financial advisors on 401(k)s and other retirement savings plans.
Explore alternative avenues to financial stability.
Build up personal savings
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This article originally appeared on GOBankingRates.com: 4 Ways Gen Z Is Already Planning for Zero Social Security Checks
