For decades, Social Security has been a cornerstone of retirement income for millions of Americans. However, as reports warn of potential funding shortages, many Millennials and Gen Z workers are left wondering: Will Social Security even exist when I retire?

Concerns over the program’s future are understandable. The Social Security Administration (SSA) itself has acknowledged that without reforms, the program could face a funding shortfall by 2034. But does this mean benefits will disappear completely? The short answer is no—but changes are inevitable.

If you’re in your 20s, 30s, or early 40s, now is the time to understand the future of Social Security and take steps to secure your own financial future. Here’s what you need to know.

Will Social Security Run Out of Money?

One of the biggest misconceptions about Social Security is that it will eventually “run out of money” and stop paying benefits entirely. This is not true.

Social Security is funded through payroll taxes, which means today’s workers contribute to the benefits of today’s retirees. However, as more baby boomers retire and birth rates decline, fewer workers are paying into the system while more people are collecting benefits.

According to the 2023 Social Security Trustees Report, the trust fund that helps cover benefit payments could be depleted by 2034. If Congress does nothing to fix the issue, the SSA would still be able to pay about 77% of scheduled benefits using only payroll tax revenue.

What’s Causing the Social Security Shortfall?

Several factors are putting financial strain on Social Security:

✔ Aging Population: More people are living longer and collecting benefits for more years.
✔ Declining Birth Rates: Fewer workers are paying into the system, reducing funding.
✔ Insufficient Payroll Tax Revenue: The current tax structure does not generate enough income to support future retirees.

The good news is that Social Security will not disappear—but younger generations may receive smaller benefits or face a higher retirement age if no changes are made.

Will Millennials and Gen Z Receive Social Security?

Yes, Millennials and Gen Z will likely still receive Social Security benefits, but they may not look the same as they do today.

Lawmakers are considering several potential solutions to shore up the program’s finances, including:

✔ Raising the retirement age – Millennials and Gen Z are already expected to retire at 67, but some proposals suggest increasing it further.
✔ Increasing payroll taxes – Raising the 6.2% payroll tax rate or eliminating the income cap on taxable wages could bring in more funding.
✔ Reducing benefits for higher earners – Some proposals suggest cutting benefits for wealthier retirees.
✔ Changing Cost-of-Living Adjustments (COLA) – Benefits may increase at a slower rate to help extend Social Security’s solvency.

While these changes could affect the amount younger generations receive, Social Security will not disappear entirely.

How Millennials and Gen Z Can Prepare for Retirement

Since Social Security may not be enough to fully support retirement, it’s crucial for younger generations to take control of their financial futures. Here are some steps you can take to ensure a secure retirement:

1. Start Saving Early

The earlier you start saving, the more time your money has to grow. Take advantage of retirement accounts like:

• 401(k) plans (especially if your employer offers matching contributions).
• Roth IRAs or Traditional IRAs for tax advantages.

2. Maximize Employer Contributions

If your job offers a 401(k) match, contribute at least enough to get the full employer match—it’s essentially free money.

3. Diversify Your Investments

Social Security is just one piece of the retirement puzzle. Consider investing in:

• Stocks and index funds for long-term growth.
• Bonds and fixed-income assets for stability.
• Real estate or rental properties to build additional income streams.

4. Plan for Rising Healthcare Costs

Medical expenses increase with age, so consider setting aside money in a Health Savings Account (HSA) if you qualify. HSAs offer tax-free savings for medical expenses and can be used in retirement.

5. Monitor Social Security Updates

Keep an eye on Social Security policy changes. You can check your projected benefits by creating a My Social Security account at ssa.gov.

6. Create Multiple Income Streams

Relying solely on Social Security may not be enough in the future. Consider:

• Side businesses or freelancing.
• Dividend stocks or other passive income sources.
• Real estate investments for rental income.

The more income streams you build, the less reliant you’ll be on Social Security in retirement.

What Happens if Congress Does Nothing?

If lawmakers fail to make any changes to Social Security, the SSA projects that by 2034, benefits could be reduced by about 23% across the board. This would mean:

• A retiree expecting $2,000 per month in benefits might only receive $1,540.
• The full retirement age could be increased, making people work longer before collecting benefits.
• Social Security disability benefits could also be impacted.

Congress has addressed Social Security shortfalls before—most notably in 1983, when lawmakers increased the full retirement age and taxed Social Security benefits. Similar reforms could happen again in the next decade.

Final Thoughts: Should Millennials and Gen Z Be Worried?

While Social Security is not disappearing, it is facing significant financial challenges. Younger generations should not depend solely on Social Security to fund their retirement.

Instead, start saving now, invest wisely, and build multiple income sources to ensure financial security in retirement—regardless of how Social Security evolves.

For the latest Social Security updates, visit ssa.gov.

Disclaimer – Our team has carefully fact-checked this article to make sure it’s accurate and free from any misinformation. We’re dedicated to keeping our content honest and reliable for our readers.