Written off

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NICK EICHER, HOST: Coming up next on The World and Everything in It: The future of Social Security.

Experts now say the fund will be insolvent by the year 2032. That is just six years from now, and it moves the deadline for reform ever closer again.

MYRNA BROWN, HOST: Insolvency would mean a significant reduction in benefits for retirees. But reforms to keep payouts could mean higher contributions for young workers—and most of them say they doubt they’ll ever see that money again. 

WORLD’s Lauren Smyth has this report.

LAUREN SMYTH: In the 1980s, the Social Security Administration tried to predict the future.

DAN DOONAN: They did all these projections: We're going to live longer, there's going to be some immigration, some emigration, there's going to be pay increases in the future. And for the most part, they did a wonderful job.

That’s Dan Doonan, executive director of the National Institute on Retirement Security. He says if contribution rates to the fund had been set just a little higher, there would be a much lower insolvency risk now. Still, he says the problem is fixable.

DOONAN: And we should expect once in a while to have to come back and sort of tune up or fine-tune the finances of Social Security. And we’ve known for a while this is needed, but we haven’t seen action.

Last week, the Social Security Board of Trustees announced the fund will be depleted sooner than expected. If revenues don’t go up by 2032, benefit checks paid to retirees and survivors will be cut by about 20%.

DOONAN: I think the country would be pretty outraged if we failed to do something by then, and I think there’d be a ton of pressure.

But for many young workers, all the hubbub over Social Security just feels like old news. 29-year-old Turner Korotzer has seen this coming for years.

TURNER KOROTZER: To me it's just kind of like, oh, another headline! “Social security is going away.” It's like, 'Yeah, I'm tracking, that's why I'm not putting my hopes into it.'

Korotzer is a Marine Corps veteran. He’s been saving for retirement since he was 18, and he’s doing it under the assumption that Social Security won’t be part of his plan.

KOROTZER: Every single time I see my paycheck, I see the deductions made for Social Security and that is annoying because it's money that you're never going to see.

Young Americans like Korotzer are widely skeptical of federal retirement benefits. About three-quarters say they don’t trust the system to pay out—even though it hasn’t missed a payment in nearly a century.

KOROTZER: They don’t care about you. They can’t care about you because they don’t know who you are. And it's not a fault of them, you know, them being malicious or something. It's just like, as a limited human being, they just don't have the capacity to care about everybody on the rolls.

Retirement expert Dan Doonan says these doubts are normal. Younger generations have always been skeptical of retirement benefits that seem far removed.

DOONAN: In the 80s, younger workers were more pessimistic. And then as they got older, they got more confident. You start seeing the checks, and you're like, "oh, this thing actually works." So I think some of that’s a healthy, youthful skepticism.

Doonan admits it could be a tough proposition getting voters to accept the higher Social Security taxes that can save the system. But polling shows retiring later and getting fewer benefits is an even harder sell. 

Now that the tradeoffs are clear, Doonan believes political action is viable.

DOONAN: So the clock is getting shorter and we’re now electing people that will be in office when this has to be addressed. There’s no benefit in waiting to the last minute.

Doonan says even in the worst case scenario, future retirees should expect to receive at least 80% of the promised benefits. And with careful adjustments, Social Security could even run a surplus someday.

DOONAN: I think it’s easy to be frustrated that we’re approaching a point where difficult decisions have to be made. But the reality is, it was done well last time, inaction has caused frustration, not our inability to solve these kinds of problems.

But Korotzer says no budget could win his trust. For him, it’s not just about the math. It’s about reliance on a system outside his personal responsibility and control.

KOROTZER: I think people consider, maybe have a misunderstanding of what freedom is. As long as you can say what you want to say, you know, like that’s freedom. But you can also be enslaved monetarily, right? So like, if I become reliant on money given to me by the government, they have de facto control over me.

Korotzer’s generation is saving earlier and investing more in workplace retirement benefits than past generations. 

So far, these habits seem to be paying off, and 80% of young workers say they’re confident in their retirement plans.

For WORLD, I’m Lauren Smyth.

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