Social Security is supposed to be self-funding. Workers – and their employers – pay into the system through taxes, and, upon retirement, recipients are supposed to receive monthly benefits. Lately, there is growing concern that the pool of money to pay benefits is shrinking and may not be available in the future. In fact, studies show it could run out as early as 2035. This has many young workers concerned that Social Security may be a Ponzi scheme.
A new survey by MedicareAdvantage.com revealed that two out of every five Americans under the age of 60 thinks this is true – and well over half of them (seven out of ten to be exact) don’t expect much if any benefits to be available when it’s time for them to retire.
Yahoo! Money looked into this and discovered there is definitely cause for concern. One of the problems is that most people in this country do not understand exactly what Social Security is and how it works. The study found that 65% of people over the age of 50 and 28% of those in their 20’s think Social Security is a Ponzi scheme with younger generations fronting the money for retirees. Experts believe that disparity is because many young people mistake Social Security as some sort of personal retirement account.
Confidence Boost Needed
The survey found that about 20% of respondents fear Social Security will not be there when they retire, and half said they think Social Security benefits will likely be reduced. Even more worrisome is the fact that about half of those surveyed said they would opt out of Social Security if they could.
A lot of people have simply lost confidence in the system. Only seven percent of people surveyed said they think the government can fix Social Security, while nearly 60% said they were only somewhat confident or not confident at all.
The one thing almost all survey respondents agreed upon was that the government should provide more financial support to American retirees. That’s something The Seniors Trust can stand behind.
The Seniors Trust is committed to increasing benefits for America’s seniors through passage of the Social Security Expansion Act. In addition to increasing benefits by about $65 per month, this landmark piece of legislation would implement a fair Cost-of-Living Adjustment (COLA) calculated based on seniors’ expenses and legally guarantee the current and future benefits of all Social Security recipients.