Will Social Security Be There For Me?

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I will be completely honest; I don’t usually pay full attention to financial or political issues. Before this year, the only financial topic I worried about was my student loan repayment. However, as I get closer to graduation, it seems like jobs are becoming scarce, and it is looking like I will be living at home for a little longer than expected. I began to actually pay more attention, and I am concerned about what I see in the news about our economy. I read stories about egg prices and the Stock Market drop, and even that we might be on the edge of a recession. All of this brought me to think about my future and what may or not be there for me when I retire.   

  I have been working since I was 16. Back then, I would look at my biweekly paycheck of $300 and wonder what this seemingly big amount was that came out of my small paycheck. That deduction was my contribution to Social Security.  However, I sit here today wondering what Social Security is, in the same way I did many years ago. 

 After doing some research, I learned that Social Security was established in 1935 and that it is designed to provide financial support to retirees, individuals with disabilities, and survivors of deceased workers.  

As of 2023, over 183 million people contribute to Social Security through payroll deductions. The program operates on a pay-as-you-work basis, where current workers get money taken from their earnings, and that helps fund the benefits of existing retirees and other beneficiaries. Employees and employers each contribute 6.2% of wages (self-employed individuals must contribute the full 12.4%.)  

To qualify for benefits, individuals earn "credits" based on their work history, with most requiring 40 credits (4 credits a year for 10 years) to be eligible for benefits when they reach retirement age (which is now 67.)  

If you listen to the news, you will likely hear stories about the program facing financial challenges. Basically, more people are retiring than joining the workforce. Some projections indicate that the Social Security trust fund may be depleted by 2035, after which it could only cover approximately 83% of scheduled benefits unless reforms are implemented. Public concern reflects these uncertainties. A recent survey revealed that about 70% of current retirees and 80% of workers are apprehensive about potential reductions in Social Security benefits . 

Until I began this project, I hadn’t really thought about how realistic it was that my generation may not be given the benefit of Social Security. As I write this, I am concerned as to what my future will entail. If Social Security were to falter in 2035 as some sources suggest, I will only be 32, a long way from retirement age. What that tells me is that I had better learn all that I can about saving and investing for retirement while I am young. While I hope that I will get a job that might give me access to a 401(k) or a pension, I learned that I shouldn't hold my breath. To prepare for my future, I need to learn about and open an Individual Retirement Account (IRA). To learn more about IRAs, you can check out my previous post on the topic!