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Paul Unnasch notices the $335 in payroll taxes coming out of his paycheck every month for Social Security, and wishes he could get those dollars back.
“If there was a way to opt out of Social Security, I would,” said Mr. Unnasch, a 27-year-old technical writer who lives in Milwaukee. “I don’t have much trust in it — I know I’ll probably get something out of it, but people are living longer and there’s a huge generation of boomers retiring now.”
An aggressive saver who socks away 20 percent of his pay in retirement accounts, he would prefer to put those Social Security payroll taxes into the stock market or use them to pay down his student loans.
Mr. Unnasch’s take on Social Security isn’t unusual among younger Americans. Research shows that a majority of young people are more pessimistic about the program than their older counterparts are. Gallup polling, for example, shows that just 37 percent of Americans aged 30 to 49 expect to receive Social Security benefits when they retire — compared with 66 percent of people aged 50 or older.
Social Security is not on a course to vanish — but the concerns voiced by young people are understandable.
Last year, the program’s retirement and disability trust funds had reserves of $2.79 trillion, but expenses have been outpacing noninterest revenue since 2010, mainly because of low birthrates that translate into a declining ratio of workers paying into the program and more people drawing benefits. As a result, the trust fund reserves are forecast to be depleted in 2035. At that point, the program would be bringing in enough cash to pay only 83 percent of the benefits promised to current and future beneficiaries, according to the most recent projection of the Social Security trustees. That would be the equivalent of a 17 percent across-the-board cut in benefits.
For younger workers, a cut of that magnitude would be painful. They have already had their benefits effectively cut as a result of legislation in 1983 that raised Social Security’s full retirement age to 67. That translates into a benefit cut of roughly 13 percent because it makes workers wait longer to receive their full earned benefit. Raising the full retirement age further, to 69, as some Republicans have proposed, would result in another average cut of 13 percent, according to the Congressional Budget Office.
“The benefit cuts from a further increase in the retirement age would hit millennials and later generations pretty hard,” said Richard Johnson, the director of the program on retirement policy at the Urban Institute. “The risk would be greatest for low-income beneficiaries who rely most on Social Security.”
Democrats and Republicans have very different views on how to address Social Security’s solvency problem.
Vice President Kamala Harris, the Democratic candidate for president, supports restoring trust fund solvency with new taxes on the wealthy. Democrats in Congress have proposed legislation that would also expand benefits, and Ms. Harris supported that idea when she served in the U.S. Senate. Ideas for increasing revenue to the program include changing the current payroll tax cap by adding a new tier of payroll taxes for higher-income Americans or identifying new sources of revenue, such as taxes on investment income.
Former President Donald J. Trump, the Republican candidate, has said he would not cut Social Security, but has not explained how he would keep the program solvent without reducing benefits or increasing taxes. He has also suggested eliminating the tax on benefits, which would hasten trust fund insolvency by as much as two years, according to the nonpartisan Tax Foundation. In Congress, Republicans have proposed phasing in further benefit cuts via higher retirement ages.
Project 2025, the governing blueprint for a second Trump administration produced by the Heritage Foundation, does not address Social Security reform. However, the foundation is on the record supporting raising the retirement age to 69 and indexing further increases to U.S. life expectancy.
Here are some of the crucial points younger workers should consider when thinking about Social Security.
Confidence Rises With Age
Whether they’ll receive Social Security benefits in retirement isn’t a new question among younger people — a review of decades of public opinion research by the National Institute on Retirement Security, a research and education organization, found that a person’s age has long determined their concern about Social Security.
“As people get older, they become more confident that they’ll receive Social Security benefits in the future,” said Tyler Bond, the organization’s research director. The worries among young people shouldn’t be confused with lack of support, he added. “That means we should be careful about making broad assertions about young people’s willingness to support changes to the program.”
Moreover, detailed survey questions posed annually to Americans over the past four decades show that strong majorities believe spending on the program should continue or increase — and there’s little variation in those opinions by age, race or political affiliation.
The value of Social Security to younger people extends well beyond retirement benefits. About 25 percent of Americans receiving Social Security are not retired workers. They include people receiving disability insurance benefits or benefits to the survivors of deceased workers, including their children. Social Security’s actuaries report that roughly one in eight children receive Social Security or Supplemental Security Income benefits by the time they reach 18.
“When younger people ask me if Social Security is going to be there when they retire, I tell them that it’s there for them now,” said Rebecca Vallas, the chief executive officer of the National Academy of Social Insurance. “It’s most frequently thought of as a retirement program, but Social Security really is a suite of insurance that provides critical economic protection all the way across the life span.”
For a young worker with average earnings who dies and leaves behind a spouse and two children, survivors’ insurance alone is equivalent to a life insurance policy with a face value of $930,000, according to the Social Security Administration.
“That’s a real game changer,” said Kathleen Romig, the senior adviser to the commissioner of Social Security on children. “If a parent dies, the child’s family loses a lot of income in cases where the parent was a breadwinner. It’s essentially a life insurance benefit for the family.”
Although precise figures are not available, research suggests that some eligible families are not receiving benefits, she added. The best way to determine your eligibility is to call the agency’s toll free number, (800) 772-1213.
A Gap Between Expectations and Reality
Financial planners who work with young people often make conservative assumptions in the retirement plans they create about projected Social Security benefits — and that reflects the views of their clients.
“They can be pretty pessimistic,” said Austin Preece, a certified financial planner in Eau Claire, Wis., who works mainly with clients in their mid-20s and 30s. “Most of my clients are just trying to save whatever they can and not necessarily thinking about what impact Social Security will have on their retirement plan.”
But Social Security turns out to be a more important source of retirement income than people in their working years expect. Fifty-eight percent of retirees say Social Security is a “major income source,” compared with just 35 percent of working people, according to Gallup polling. The reverse is true for 401(k)s and individual retirement accounts — 50 percent of working people say they expect those savings to be a major source of income, compared with just 29 percent of retirees, Gallup reports.
Gallup has found that the gap between expectations and reality has persisted over the past two decades. A key reason is that retirement savings accounts come up short for so many retirees. The median retirement account holdings for workers 55 to 64 years old was $185,000 in 2022, according to the Federal Reserve, and the amounts saved by low-income workers have fallen in recent years.
Social Security overdelivers on the expectations of working people because of the design of the program, said Christine Benz, the director of personal finance at Morningstar and author of the new book “How to Retire: 20 Lessons for a Happy, Successful and Wealthy Retirement.”
“Social Security has every single one of the attributes that you would look for in a perfect source of cash flows in retirement,” she said. Those attributes include lifetime guaranteed income, which serves as a form of insurance against outliving your resources, a benefit for spouses when you die and automatic annual inflation adjustments.
“You can’t find those things in an investment portfolio or any sort of annuity,” she added.
Social Security also works as a stabilizer in years like 2022, when equity and bond markets plunged and inflation soared. “Social Security income did everything that those portfolio income sources did not do that year,” Ms. Benz said. “It was a stabilizing source of income, and it delivered a nice inflation adjustment” — 8.7 percent for 2023.
Check Your Future Benefits
Social Security offers a useful statement of your benefits, but these days most people need to download it online. So a good starting point to understand benefits is to set up an online account and download your statement at least once a year.
The statement projects retirement benefits and includes reminders on the availability of disability and survivor benefits. It also includes your wage history and an opportunity to correct errors — which is important, because Social Security will ultimately use your highest 35 years of wages to calculate benefits.
Until 2010, Social Security mailed an annual statement to workers. But budget cuts have eliminated most mailed statements — they are sent only to workers aged 60 or older who have not yet claimed benefits or set up online accounts. The fact that most people rarely hear from the agency could help explain young people’s skepticism about the program.
Advocates have pushed to restore the paper statements, to no avail. “People should be getting a regular annual statement in the mail,” said Nancy Altman, the president of Social Security Works. “It would really help younger people to understand that they have a stake in this program.”
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