Social Security: Why It Matters for Young People, Not Just Retirees

Young people are skeptics when it comes to Social Security - polling shows that most don’t think the program will pay them a benefit when they retire sometime down the road.

You might think that’s the result of the barrage of negative, often misleading news coverage of Social Security’s financial challenges - and that’s certainly a factor. But researchers who have reviewed decades of public opinion research have found that a person’s age has long determined their concern about Social Security - and that pessimism is par for the course.

This weekend in the New York Times, I examine the attitudes of young people about Social Security - and how the program’s future direction would impact them.

Social Security is not on a course to vanish — but their fears are understandable.

The program’s retirement and disability trust funds had reserves of $2.79 trillion last year, but expenses have been outpacing noninterest revenue since 2010, due mainly to low birthrates that translate into a declining ratio of workers paying into the program and more people drawing benefits. As a result, the trust fund is forecast to be depleted in 2035; at that point, the program would be bringing in enough cash to pay only 83 percent of the benefits promised to current and future beneficiaries, according to the most recent projection of Social Security’s trustees. That would be the equivalent of a 17 percent across-the-board cut in benefits.

For younger workers, a cut of that magnitude would be painful. They already have had their benefits effectively cut as a result of legislation in 1983 that raised Social Security’s full retirement age to 67. That translates into a benefit cut of roughly 13 percent, because it makes workers wait longer to receive their full earned benefit. Raising the full retirement age further, to 69, as some Republicans have proposed, would result in another average cut of 13 percent, according to the Congressional Budget Office.

That means young people should be paying attention to what politicians say about their plans to reform Social Security. It’s also worth remembering that the value of Social Security to younger people extends well beyond retirement benefits.

About 25 percent of Americans receiving Social Security are not retired workers, including people receiving disability insurance benefits or benefits to the survivors of deceased workers, including their children. Social Security’s actuaries report that roughly one in eight children receive Social Security or Supplemental Security Income benefits by the time they reach 18.

My story for the Times outlines the key points younger voters should consider during this election season when thinking about Social Security.

Social Security COLA for 2025 will be 2.5%

The Social Security Administration announced that the cost-of-living adjustment for benefits next year will be 2.5%. That’s in line with expectations, as the pace of inflation has cooled this year.

The automatic adjustment is geared tied to the average inflation data for July, August and September

The 2025 COLA is within the normal range, following several abnormal years that saw a cumulative increase of nearly 19% to keep up with the fast pace of inflation.

Inflation has cooled off this year. For more details, see this Wall Street Journal article.

Harris proposes Medicare enhancements to cover home care, vision and hearing

Vice President Kamala Harris outlined a plan for Medicare to cover home health care, vision and hearing during an appearance on ABC’s “The View.”

These are big gaps in what Medicare covers. The Biden administration addressed all three in the Build Back Better legislation that failed to win approval by Congress in 2022. That legislation also proposed adding a standard dental benefit to Medicare - something that doesn’t appear to be included in the new Harris proposal. That might be due to the cost of adding coverage - or opposition from some quarters of dentistry that don’t want to be subject to Medicare fee schedules.

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