Why Social Security Should Matter To Young People

Between Social Security's looming budget shortfall (current estimates have the program's trust funds running out starting in 2033) to the high potential of the program's increased financial insecurity during Donald Trump's second term, Social Security is receiving a lot of attention lately. However, while much of the focus on Social Security generally concerns current beneficiaries or those generations soon to retire (for instance, how Gen X could ultimately impact Social Security's retirement benefits), it's increasingly important for younger generations to pay attention to the program's future.

As NYU marketing professor, author, and podcast host, Scott Galloway, previously warned, there is a strong likelihood that the Trump administration's policies over the next four years will severely impact young people down the road. From the national deficit to planned mass deportations, children and young people will face increased challenges as a direct result of many of the incoming administration's proposed policies.

While it still remains to be seen which of the policies promised on the campaign trail will ultimately be enacted, it's safe to assume programs like Social Security will face increased pressure that will not only affect current beneficiaries and retirees, but affect future generations as well. Even though many younger generations assume they will never actually receive the kinds of benefits that baby boomers receive (Gallup found that just 37% of those aged 30 to 49 expected to receive Social Security benefits), their interest in the program's future could ultimately be vital to ensuring it continues.

While it can be easy to focus entirely on retirement, it's important to realize the many other programs available under Social Security's umbrella. Even more so, it's important to understand how a lack of future funding for Social Security can affect far more people than simply the retired. Beneficiaries that would be affected by Social Security's shortfall include those receiving disability insurance benefits as well as survivors of deceased workers (and their children). In fact, according to a Social Security fact sheet, 24.6% of Social Security beneficiaries were not retired workers, as of June 2024. Disability and survivorship benefits offer protections to young workers, regardless of their retirement outlook, and can provide a significant reason for younger generations to care about Social Security. Plus, it's worth mentioning that 2.5 million children in the U.S. received either Social Security or Supplemental Security Income benefits at the end of 2023.

All of this isn't to take away from the massive impact that Social Security has on the country's retirees. In fact, according to a November 2024 survey from Bankrate, a whopping 77% of current retirees are reliant on Social Security benefits to pay their monthly expenses (compared to just 15% who reported not being reliant on those benefits every month). Similarly, 53% of those who have yet to retire reported expecting to rely on their Social Security benefits in order to pay their necessary monthly expenses during retirement. Even more troubling was that 28% reported expecting to be very reliant on their monthly benefits.

It's worth noting just how significantly changes to Social Security's funding in the present can impact generations down the road. For instance, one of the top "solutions" that often comes up for Social Security's funding problem is delaying the full retirement age. For those who might not realize this, this policy was previously put into place in 1983, in which legislation moved Social Security's full retirement age to 67 (for those born in 1960 and after). However, this policy translates to a 13% cut in benefits for younger generations who now have to wait even longer in order to receive their earned benefits. Despite this, many in the Republican Party continue to suggest another full retirement age increase, this time to age 69 (which would similarly result in another 13% benefit cut for younger generations).

As it stands, before Donald Trump's second term begins, Social Security's trust funds will be entirely depleted by 2035. This means that Social Security would only make enough money to pay out 83% of the monthly benefits promised to current and future beneficiaries. As Richard Johnson, a director of retirement policy at the Urban Institute, explained to The New York Times, "The benefit cuts from a further increase in the retirement age would hit millennials and later generations pretty hard. The risk would be greatest for low-income beneficiaries who rely most on Social Security." There are also important considerations to factor in when retiring later in life that could similarly make an increased retirement age bad for many Americans.