Just a few years ago, Social Security reform was a hot topic among the young and politically minded, says Ashley Killough, a graduating senior at Baylor University in Texas.
Many wondered if the whole system, perennially labeled as a program in crisis by policy analysts across the political spectrum, would collapse by the time they reached retirement age. As former President George W. Bush aggressively pushed to allow workers to put some of their Social Security money into personal accounts, their interest was piqued. A major overhaul—even partial privatization—looked possible.
The plan to privatize failed, of course, and a few years later the economy began to slide. Now, says Killough, Social Security reform is barely a concern for her or the young people she knows. Instead, their most pressing problem is finding jobs in a recession economy.
The economic crash of 2008 may have temporarily pushed Social Security reform largely off the national agenda, but scratch the surface a bit and you’ll see that the same fears, issues and generational tensions about the system still exist—and may even be exacerbated by the current economic climate.
A January poll conducted by the Pew Research Center for the People & the Press found that the public has certainly not forgotten about the issue. Respondents ranked Social Security their fourth-biggest concern, behind jobs and the economy but ahead of energy, health care and the deficit. Sixty-three percent said it should be a top priority for the president and Congress, down just 1 percent from the previous three years.
“While Social Security may not be the number one priority right now because everyone is focused on getting through the recession, it’s definitely not something we can leave on the back burner,” says Killough.
Last year, Social Security’s trustees projected a shortfall of more than $4 trillion, and current trends indicate the program will begin running a deficit in a dozen years.
“With [my] parents’ generation being much larger than [my] generation, we’re going to have to either cut benefits or raise the Social Security tax,” says Killough. And that troubles her, as it does many of her Gen-X and millennial peers, who were born after 1981.
“I’ve pretty much always assumed that Social Security would be depleted by the time I qualified for it,” says Jeff Simmons, a 27-year-old personal trainer in Colorado. “I’m just trying to have a good [individual] retirement plan, and hopefully a good mutual fund and savings account.”
Joshua Noyes, a 27-year-old IT worker in St. Louis, echoes this. “I am not relying on Social Security at all for my retirement planning,” he says. “If there’s any money left when I’m ready to retire, I’ll take it, but I plan on having a hefty retirement fund that I’ve saved and invested on my own to live off of.”
Their attitudes are congruent with the findings of a 2008 study about the younger generations and financial planning. Sponsored jointly by the American Savings Education Council and AARP, the study found that 41 percent of millennials and Gen-Xers expected their largest source of retirement income to come from an employer-sponsored savings plan, such as a 401(k). Only 7 percent believed Social Security benefits would provide the bulk of their retirement income (compared with 17 percent of nonretirees 40 and over).
It’s hardly surprising to find pessimism about Social Security among a generation of Americans who have grown up hearing warnings that the program is in peril. As early as 1978—long before his executive branch push for private accounts—George W. Bush warned during a Texas congressional run that the program was headed for trouble.
“Most people [my] age see the program as a miserable failure,” says Noyes, who expresses frustration with older voters for being what he calls insufficiently aware of or concerned about the program’s failures.