What do Americans believe about Social Security? A new poll by Nationwide Financial, with splits by generation, gives us some answers. Here are four key items from the survey:
- Millennials are much less informed about the general nature of benefits: on average, this age group (ages 25 – 40) guessed that the full retirement eligibility age was 52 (compared to an average guess of 59 for Gen Xers (ages 41 – 56) and age 64, for Boomers and older; the actual age is, of course, age 67 for all but those closest to retirement.
- Generation Xers, on the other hand, have the least confidence in the security of Social Security funding — with 83% either “strongly” or “somewhat” agreeing that they “worry about the Social Security program running out of funding in my lifetime,” compared to 77% of Millennials and only 61% of Boomers and older.
- However, nearly half of Millennials, 47%, strongly or somewhat agreed that “I will not get a dime of the Social Security benefits I have earned,” compared to 33% of Gen Xers and 12% of Boomers and older.
- At the same time, over half of Millennials, 61%, agree or strongly agree that “Social Security on its own should be enough to help me live comfortably in retirement,” which is far, far more than the 41% of Gen Xers and 31% of Boomers and older.
What should we make of this?
The standard response to these survey results is to say something like this, quoting CNBC in an article titled (as is par for the course for this sort of article), “71% of Americans are worried Social Security will run out of money in their lifetimes. Why experts say that won’t happen”:
“The trust funds on which Social Security relies to pay benefits have been running low. The last official projection by the Social Security Administration indicated those funds could run out in 2035, at which point 79% of promised benefits would be payable. That estimate did weigh any pandemic effects.
“Even so, fears that the program will run dry and benefit checks will stop are unfounded, said Shai Akabas, director of economic policy at the Bipartisan Policy Center. . . .
“’It is highly unlikely that it is going to disappear anytime soon.’”
But let’s give these respondents a fair hearing, rather than immediately writing them off as uninformed.
As to the apparent belief that Americans can collect Social Security far earlier than is actually the case, I can only guess that survey-takers misunderstood the question as I don’t believe it’s credible that substantial numbers believe they can actually collect Social Security so young. Perhaps they understood this to include eligibility for disability, perhaps they thought this was the age in which a person would have earned the minimum number of “coverage quarters” required, or something else. I tend to discard this answer as simply not meaningful.
Are Americans right to believe that Social Security may “run out of funding”? When it comes down to it, it’s a matter of interpretation: after all, I do believe it is very likely that Congress will not act before the Trust Fund runs dry, and that, regardless of when they act, it is highly likely that they will shift Social Security’s funding to that of ordinary tax revenues rather than a special Trust Fund. After all, the Trust Fund made sense when the program was established and it was intended that funds would build up for a time before being paid out, and again in the reforms of the 80s when Baby Boomers had hit their peak earning years, but now there is no such demographic bulge but merely an ever-diminishing number of workers relative to retirees. What’s more, the Democrat’s proposal for age 60 Medicare uses general revenues rather than a dedicated funding source. In addition, the child tax credits being celebrated now are being called “Social Security for children” despite any similar special “Trust Fund.” These developments, along with substantial plans for government spending expansion in general, make it all the more likely that the notion of a “Social Security Trust Fund” will not continue after its current funds are depleted.
Are Americans — and especially Millennials — right to suspect that they personally will not receive Social Security benefits? Again: it’s not unreasonable. In an environment in which there is so much talk of so much government spending, paired with seemingly endless partisan rancor, it indeed seems reasonable to surmise that the Social Security system, 27 to 42 years from now, could be much-altered and, quite possibly, be reserved for the poor. It seems rather likely that young adults in particular would believe that, regardless of their current finances, they would make their way up in the world to earning enough, relative to their peers, to be disqualified for welfare benefits.
Finally, again, in a world in which there is so much talk of a substantial expansion of government benefits, and so much disconnection of Social Security from its prior promise that is earned by paying into the system, it is no surprise that the majority of Millennials would view it as just another benefit system. Consider, after all, that 43% of Millennials support a “universal basic income,” compared to 37% of Gen Xers and 22% of Boomers, according to Victims of Communism polling; and that 47% of Millennials, compared to 39% of Gen Xers and 34% of Boomers, had a favorable opinion of the term “socialism.” If they believe that the government ought to, in a moral sense, be giving ordinary Americans more money than is now the case, it stands to reason that expectation would likewise be the case for Social Security. And, of course, the refrain of Democratic candidates during the last election was that they would “expand Social Security,” and surely far more voters heard that refrain, than dug into the details to learn the expansion promised was relatively small in scale.
What this boils down to, in the end, is not as simple as a throwaway explanation that Americans aren’t educated enough on Social Security. Rather, it seems more likely that their preferences have simply changed, compared to their elders — a change which may be positive, to the extent that it opens up opportunities for a complete redesign of the system, but may increase the difficulty of a successful political resolution, if too many Americans believe they can get the proverbial “free lunch.”
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