Commentary: Social Security isn’t doomed for millennials, Gen Xers
Even the worst-case scenario shows that the program will still pay out benefits.
[Portland Press Herald] I have good news for younger generations worried that they won’t be able to claim their Social Security benefits because we older generations have ripped them off and will be leaving nothing behind: Your fears are unfounded.
Don’t just take my word for it. Consider the work of my colleague Charles Blahous at the Mercatus Center at George Mason University, who is a relative pessimist (some would say an alarmist) on this issue. His reputation commends his work as a good benchmark for where Social Security really stands.
According to his estimates, if no further steps are taken to shore up the finances of Social Security, the system will stop being able to meet its scheduled payment obligations sometime in the 2030s. (Note that benefit hikes are part of the schedule.) That would be bad, but even under this scenario the system is still paying out a roughly constant level of inflation-adjusted benefits over time, at least as those benefits are defined as a percentage of workers’ taxable earnings (about 13 percent). Of course, to the extent those taxable earnings rise, the benefits will be rising, too, even if not at a spectacular pace.
Keep in mind that this is the worst-case scenario offered by a relative pessimist.