Social Security has long been a pillar of retirement income for Americans, but for Millennials and Gen Z, its future is uncertain. With trust fund reserves projected to be depleted by 2033, many younger workers are skeptical about whether they will receive full benefits when they retire. In fact, surveys show that 45% of Gen Z and 39% of Millennials believe they won’t receive anything at all.
While Social Security isn’t expected to disappear entirely, potential benefit reductions and policy changes could reshape what retirement looks like for future generations. This uncertainty raises an important question: How should Millennials and Gen Z prepare for a retirement where Social Security may play a diminished role?
The Growing Skepticism Among Younger Generations
Millennials and Gen Z have grown up in an era of financial instability—rising student loan debt, housing affordability challenges, and economic downturns. It’s no surprise that they’re skeptical about Social Security’s future.
A Cronkite News survey found that nearly half of Gen Z (45%) and 39% of Millennials believe they won’t receive any Social Security benefits when they retire. (cronkitenews.azpbs.org) This skepticism is fueled by:
- Concerns over government debt and fiscal mismanagement.
- A history of policy shifts that have gradually raised the retirement age and adjusted benefits.
- The widespread belief that younger workers will pay into a system that won’t be there for them.
While Social Security may still exist in 2033, it will likely look different. The question isn’t just whether Millennials and Gen Z will receive benefits—but how much and under what conditions.
The 2033 Social Security Crisis Explained
The skepticism surrounding Social Security isn’t unfounded. According to the Social Security Administration, the program’s trust fund reserves are projected to be depleted by 2033 if no policy changes are made. But what does this actually mean?
- Social Security won’t completely run out of money. Even after 2033, payroll taxes from workers will continue funding the system.
- However, without additional reforms, Social Security will only be able to pay about 77% of scheduled benefits using incoming tax revenue. (nasdaq.com)
- This means retirees could face an automatic 23% benefit cut unless new policies are enacted.
For Millennials and Gen Z, this raises a critical issue: Relying on Social Security alone is no longer a viable retirement strategy. While benefits may still exist, they are likely to be reduced or adjusted in some way—making personal savings more important than ever.
Potential Policy Solutions and Public Opinion
With the trust fund running low, lawmakers have several options to fix the Social Security shortfall. The most commonly discussed solutions include:
- Raising Payroll Taxes – Increasing the tax rate on workers’ wages would help fund the program for longer. This is the most popular solution among the public, as it spreads the financial burden.
- Increasing the Retirement Age – Since life expectancy has risen, some policymakers suggest raising the full retirement age beyond 67. However, this is the least popular solution, as it forces people to work longer before collecting benefits.
- Adjusting Benefits – This could include reducing benefits for higher earners or means-testing eligibility. However, benefit cuts are highly controversial and could disproportionately impact lower-income retirees. (marketwatch.com)
While no single solution is perfect, Social Security’s future depends on difficult policy decisions. Younger generations should assume that some combination of these changes will occur—meaning benefits will likely be smaller, delayed, or taxed at higher rates. This makes personal financial planning essential.
What This Means for Gen Z and Millennials
With so much uncertainty surrounding Social Security, one thing is clear: Millennials and Gen Z cannot afford to rely on it as their primary source of retirement income. Even if benefits are still available, they may be smaller, delayed, or taxed at higher rates.
To take control of their financial future, younger generations should prioritize building their own retirement savings. Here’s how:
- Maximize 401(k) and IRA Contributions – Employer-sponsored 401(k) plans and tax-advantaged IRAs offer a way to build long-term wealth, with compound interest working in your favor.
- Invest Early and Consistently – Even small contributions in your 20s and 30s can grow significantly over time. Delaying investment means missing out on decades of compound growth.
- Diversify Retirement Savings – Relying solely on one source (like Social Security) is risky. Investing in stocks, bonds, real estate, and alternative assets can create multiple income streams for retirement.
- Plan as if Social Security Won’t Be There – The safest approach is to assume reduced or no benefits and save accordingly. If Social Security remains intact, it will be a bonus—not a necessity.
Conclusion
While Social Security isn’t disappearing, its future is uncertain. By 2033, the trust fund could be depleted, leaving only 77% of promised benefits available unless major policy changes are made. Millennials and Gen Z are right to be skeptical, and the smartest move is to prepare for a future where Social Security plays a much smaller role in retirement.
The takeaway? You are your own safety net. The best way to secure your future is to take charge of your retirement savings today. Build wealth, invest wisely, and ensure your financial security—so that when the time comes, you won’t have to rely on a system that may not be there for you.
