Fun Social Security Facts for Gen Y

August 3, 2012 at 11:46 pm Leave a comment

How does Gen Y view the future of social security?  How does the substantially larger generation that follows the busters feel, especially in light of the new baby bust we are entering?  Research by iOMe regarding social security views among Millennials (aged 18-29), 2011 data located at http://iomechallenge.org/?page_id=564, reveals that 50% of that generation does not believe social security will exist when they reach their current social security retirement age.  The good news is that the government can always raise taxes to keep the social security system going (although not without economic ramifications), and early retirement age remains fixed at age 62, where an actuarial adjustment is made reducing the full retirement benefit.  Social security disability still has no age restriction for those unfortunate enough to be unable to work longer may be able to claim.

The iOMe study indicates that 40% of those who believe social security will not exist, are not saving anything for retirement.  Why does a generation that is larger than the baby bust they follow, and especially in light of us now entering a second baby bust for newborns, not making a greater effort to save?  I imagine high unemployment and underemployment are large factors.  I also suspect that our society may not have given them a proper financial education.  Perhaps, they do not understand the impact of compounding or the current economic situation has shaken them to the point that they do not trust even relatively low risk investments.  Is it possible that they do not understand that the two baby busts surrounding their generation will dramatically reduce the available tax base for payment of benefits?

It would be interesting to have explored the Millennials attitudes on when they retire.  When I estimate when I expect to retire and how long I will be in retirement for calculation purposes, I actually do not hold a great deal of stock in the actuarial tables, and I approximate based on my grandparents’ life spans.  Does the millennial generation expect substantial gains in quality and longevity of life during their lifetime that could result in not retiring?  The implications of both would dramatically impact our social security system (and society).  I feel the impact of your demographic cohort is very important at shaping your beliefs, and I would love to hear any Millennials views on social security and their own plans for retirement.

Thanks for reading and have a wonderful day!  Please be sure to subscribe to my blog and follow me on twitter@ChristineGurney.

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Christine Gurney

A pension professional who shares her thoughts and ideas about the pension world for industry members and anyone else interested.

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