Social Security’s Uncertain Future Leading to Strategy Changes for Millennials -

It’s certainly no secret that the long-term future of Social Security is a little shaky, This should come as no surprise to anyone who’s given thought to how this once predictable component of retirement financial plans will fit into their future. Social Security has been a solid performer for over eight decades, hasn’t it, with benefit payments never skipping a beat?

But as the saying goes, that was then, this is now, and the “now” includes the steadily evaporating financial reserves being used to pay promised benefits. Since 2010, the primary source of revenue for Social Security–payroll taxes–has been insufficient to pay scheduled benefits, causing the program to rely on its other revenue sources–interest and federal income tax on Social Security benefits–to make up the difference. 2021 saw another downward milestone, when benefit commitments outstripped the total revenue sources stream, forcing the program to begin to dip into its cash reserves.

Social Security’s cash reserves–its trust fund balances–had reached a peak of roughly $2.9 trillion at the end of 2020, and are now on the decline as scheduled benefits continue. Current projections are that the reserve funds will be fully depleted around 2033, forcing the program to shift to a cash-in, cash-out basis and reduce payment levels by more than 20%. That’s where the uncertainty comes in for millennials, those born between 1981 and 1996.

International journalist Justice Nwafor, writing for, suggests that millennials will be exploring other forms of retirement income and de-prioritizing the role of Social Security benefits in their retirement planning. As the Nwafor article suggests, advisors are likely cautioning millennials to treat Social Security benefits more like a potential “bonus” rather than a strategic component of their plan. His post discusses additional strategies that this population cohort might consider to work around the absence of definite Social Security benefits, including keen budgeting and going all in on any tax-preferred investment strategies available to them.

Check out Nwafor’s post here.

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