Expert’s Social Security Advice to Gen Zers: “You Have Time to Plan” - nbclosangeles.com
CNBC’s Cheyenne DeVon, in a report posted on nbclosangeles.com, suggests millennials and Gen Zers harbor concerns that Social Security faces oblivion and that “… 40% think they “won’t get a dime” of Social Security benefits.” She points to repetitive news accounts describing Social Security’s long-term funding problems and the projected depletion of financial reserves in about a decade as the source of these concerns.
Given these fears, Ms. DeVon provides background on the original design premise of Social Security, along with an explanation of the program’s life after reserve fund depletion. Her article references comments from retirement expert Anne Lester, author of “Your Best Financial Life: Save Smart Now for the Future You Want.” Ms. Lester expresses doubt that the point of zero reserves will be reached, but suggests that younger workers like those labeled Gen Z (generally, those with birth years between 1997 and 2012) have the opportunity to adjust savings strategies for the long haul. Her conclusion is “… young workers can prepare for a potentially reduced Social Security benefit in the future by slightly increasing their contributions to their other retirement savings accounts, Lester says.”
The full post by Ms.DeVon can be accessed here.
While Ms. Lester offers good advice for younger workers, it should be stressed that efforts are continually underway to develop pragmatic solutions to Social Security’s looming insolvency problem. An example of such a solution can be found in the Association of Mature American Citizens’ (AMAC, Inc.) Social Security Guarantee. AMAC believes Social Security must be preserved and modernized. This can be achieved through slight modifications to cost-of-living adjustments and benefit calculations for high-income beneficiaries, coupled with gradual increases to the full (but not early) retirement age. AMAC supports an increase in the threshold where benefits are taxed and then indexed for inflation and calls for eliminating the reduction in benefits for those choosing to work before full retirement age. Summaries of the AMAC position–the AMAC Social Security Guarantee–can be viewed at AMAC.us.