Fearing Social Security Benefits Will Run Out, Young Workers Are Saving More
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What is the main topic discussed in this episode?
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Here's your Money Briefing for Tuesday, July 16th. I'm J.R. Whalen for The Wall Street Journal. Americans contribute about $1 trillion a year into Social Security through payroll taxes. And yet many workers fear there won't be any benefits available for them when they retire.
Here's where language gets really important. Is Social Security going to run out of money? No. Are Social Security's trust funds going to run out of money? They might if the government doesn't take action.
What does that mean for people saving for retirement? We'll ask personal finance reporter Joe Pinsker after the break.
Access to affordable credit helps me pay my employees, but I don't really need it. Inflation is killing me. But who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill. See? Banks and credit unions help small businesses make payroll. This bill would cut the vital resources they need. While increasing megastore profits.
How much money do workers pay into Social Security each year?
They deserve it, don't they? Tell Congress, stop the Durbin Marshall money grab for corporate megastores. Paid for by the Electronic Payments Coalition.
Many Americans fear there won't be Social Security funds available when they retire. Wall Street Journal personal finance reporter Joe Pinsker joins me. Joe, about how much money is paid into Social Security each year?
Last year, workers in the U.S. paid about $1.23 trillion into Social Security, and that was in the form of payroll taxes, which should sound familiar to just about anyone who does paid work in this country.
How does that compare to how much money was paid out?
The program paid out about $1.38 trillion in overall benefits, so more than it took in in taxes. But that's the gap that government reports have been warning about for a while. It's paying out more than it's taking in.
Over the past few decades, surveys of working Americans have shown they fear there won't be any money left for them by the time they retire. Why do they feel that way?
Well, there are a couple things going on here. One of them is just some really long-term doubts about Social Security. They're about as old as the program itself, I guess you could say.
Is Social Security currently paying out more than it takes in?
Like, if you look back at the 1930s when Social Security was created— There was actually a Republican presidential candidate, Alf Landon, who was sowing doubt about the program even before like the first monthly checks went out. So that sort of skepticism about the program that you can't really bank on it being there when you need it, that's been around for a while. More recently, you have now decades of government warnings that the program's trust funds are going to run out of money. Many people mistakenly take that to mean that the program as a whole will run out of money when really it's just one part of its funding.
How do young people feel today about Social Security compared to previous generations?
In some ways, it's similar to the past, but I'd say that some of the things that distinguish young people's feelings today are a general lack of trust in institutions. And so they don't really have that much faith that the government is going to do what's needed to shore up the program's finances. Younger workers today, especially millennials, there's this generational component where people feel frustrated because they feel like older generations are getting something they won't.
Seems like there are a lot of mixed messages out there about Social Security. Is it actually on track to run out of money?
Here's where language gets really important.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:00–1:49
2
How much money do workers pay into Social Security each year?
1:49–3:06
3
Is Social Security currently paying out more than it takes in?
3:06–5:07
4
Why do many workers believe Social Security might run out by retirement?
5:07–6:49
5
What is the difference between Social Security running out and its trust funds running out?
6:49–9:06
6
What will happen when the trust funds are projected to run out around 2035?
9:06–9:30
Speakers
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