This edition of the podcast examines a question that has fascinated me for years -- why do so many of us think that Social Security only matters to older people?
Yes, retirement benefits are the biggest component of Social Security. But the program also is tremendously important for disabled people of all ages, and surviving children and spouses of deceased beneficiaries. And maybe more to the point - the future of Social Security will matter very much to today’s young people. They will need Social Security every bit as much as today’s retirees and near-retirees . . . and probably more so in many cases if current economic and retirement benefit trends persist.
Yet many young people have heard the endless refrain that they should not count on Social Security to be there for them in the future. That is not surprising, considering the negative, often false propaganda uttered by politicians hostile to Social Security and the financial services industry, and misleading media coverage.
My guest on the podcast this week argues that worry about Social Security’s viability could become self-fulfilling if it erodes political support. That would be especially damaging for young people when they retire, argues Peter Arno, an economist at the University of Massachusetts-Amherst, and a scholar of both Social Security and health policy.
Arno points to four trends that suggest millennials will need to rely to a much greater extent on Social Security than current retirees and those approaching retirement now. They will be far less likely to receive retirement income from defined benefit pensions, and they have lower rates of home ownership than earlier generations. And, wage stagnation and crippling levels of student debt make it impossible for many to save for retirement.
Arno argues that there is a historic opportunity to unite boomers and millennials in support of strengthening Social Security. In a provocative article that he co-authored recently in the American Prospect, he takes on the root causes of the cynicism so many young people have today about Social Security and argues that Social Security should be a centerpiece policy issue for anyone interested in civil rights and social justice. Arno’s co-author on the article is Ann Beaudry, a progressive author and policy strategist who has worked with the National Committee to Preserve Social Security & Medicare, and other foundations.
“Social Security is the most successful anti-poverty policy in the history of the United States,” Arno says. “And this is not true just for seniors, but across the entire life cycle and the entire population. It reduces more poverty for children than any other policy, more poverty for working adults and more poverty for seniors. So it, it's an inter-generational antipoverty policy.”
The program’s impact is especially profound for people of color and women, he adds, noting that wage disparities create economic disadvantage that persists in retirement.
I also feature Arno’s comments in my column for Reuters this week. There, I get into some of the most recent Gallup poll data on Americans’ level of worry about Social Security - and what the program’s finances actually show these days.
This week’s podcast is part of a the subscription RetirementRevised.com newsletter. Right now, the newsletter is publishing a series of downloadable guides on the key challenges of retirement - each edition pairs a guide with a podcast interview with a top expert. So far, we’ve had guides on the transition to Medicare and how to hire a financial adviser. Next up is the guide to maximizing Social Security benefits, featuring a podcast interview with Mary Beth Franklin - another journalist who has been covering Social Security for years, and probably is the only person I can think of who geeks out over Social Security as much or more than I do!
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Next up: Your guide to smart Social Security strategies
The next edition of the subscription newsletter includes the latest in my series of retirement guides, and I’m really excited about this one.
The guide looks at strategies for maximizing Social Security benefits - and the podcast features an interview with a journalist who geeks out over Social Security just as much as I do - Mary Beth Franklin. Mary Beth is a columnist for Investment News and a long-time financial reporter and author based in Washington, D.C. Mary Beth possesses a near-encyclopedic knowledge of Social Security, and we sat down recently to discuss just about every aspect of Social Security strategy. You won’t want to miss this one!
Why millenial pessimism on Social Security could be a self-fulfilling prophecy