A recent story published by CNBC uncovered the fact that younger generations, including Millennials, are not counting on Social Security for a lot of help in their retirement and plan to rely more on their personal savings rather that Social Security. This is a good thing because Social Security is never going to makeup close to 100 percent of a worker’s income once they retire, so focusing on other sources of savings should be important to everyone, but Millennials also don’t have the facts when it comes to Social Security.
More than 60 percent of retirees rely on Social Security for their primary income, but just 13 percent of Millennials believe that will be the case for them, according to Wells Fargo which conducted the study, which was reported by CNBC. It is good younger generations will be looking at alternative retirement sources, such as pensions or private retirement amounts, but it appears they are not quite informed correctly of Social Security’s future.
More than 70 percent of workers, many of them Millennials, said they feared that Social Security would not be around for them when they retire. Many of these people probably have heard Social Security is “going broke” or “insolvent,” but they don’t know the specifics. Yes, beginning in 2035, if no legislation is passed to change anything, because of funding inadequacies, Social Security will be able to pay just 80 percent of full benefit amounts. There is a big difference between seeing a 20 percent reduction in benefits and 100 percent reduction, which is what some Millennials believe will happen. The fact is that if nothing changes Social Security will still be able to pay 80 percent of full benefit amounts all the way through 2093 according current projections. The fact is Social Security is not going anywhere and Millennials should count it as a supplement to other retirement plans because it will be available to them.
