Earlier this month, we talked about Social Security’s funding challenge and what Congress can do about it.
Today, let’s talk about some misconceptions.
This J.P. Morgan chart helps put these into perspective:
Myth #1—Young workers will get nothing from Social Security.
Not quite.
As you can see in the chart, even under a worst-case scenario where Congress does nothing, ongoing payroll taxes will still cover 62% of promised benefits through 2100.
Social Security isn’t going away, but future payout formulas will likely change.
Given this potential gap, building personal savings early is critical for younger generations.
As a courtesy to you, we’re happy to meet with your adult children to help them navigate workplace retirement plans, investing and other financial decisions. If someone in your family could use a sounding board, feel free to introduce us.
Myth #2—I should take my benefit now because it might be cut later.
While understandable, concern over potential policy changes is only one factor in your claiming decision.
A big reason sudden benefit cuts for current retirees are unlikely comes down to political reality: older Americans consistently vote at the highest rates.
As the voter turnout chart highlights, 75% of adults aged 65 and older turned out in the 2024 federal election, compared to just 48% of 18-to-24-year-olds.
Because this group carries so much voting power, lawmakers face immense pressure to protect current retirees. Future adjustments, therefore, are likely to be phased in gradually over time or target higher earners rather than impact current benefits.
Bottom Line
Social Security faces real challenges, but uncertainty doesn’t have to drive your financial decisions.
Whether you’re encouraging younger family members to save early or deciding when to claim your own benefits, focus on what you can control: saving, planning ahead and making decisions based on your individual circumstances.
As always, please reach out with any questions.
Dave
Before You Go
Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.
Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.
This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.
Source:
1: J.P. Morgan Asset Management, Guide to Retirement, https://cdn.jpmorganfunds.com/content/dam/jpm-am-aem/global/en/insights/retirement-insights/guide-to-retirement-us.pdf
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