Millennials Are Most Likely To Suffer Thanks to Depleted Social Security Fund

Wide shot of millennial couple lounging in their living room, planning out their finances and looking at their account via online banking.
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In 2019, millennials overtook baby boomers as America’s largest living adult generation — but in terms of Social Security, the older set might be getting the last laugh.

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The 2022 annual report from the Social Security and Medicare Boards of Trustees shows that funds for full payments are now projected to run out one year earlier than previously anticipated. Unless lawmakers take action, Social Security recipients will start receiving just 77% of their scheduled benefits in 2034.

That’s bad news for all retirees and anyone working who hopes to one day get there — but not all age groups will feel the same impact. If lawmakers fail to act, the last generation of the 20th century — millennials born between 1981-1996 — will be in for the roughest ride.

Ruling Out the Bookend Demographics

Baby boomers were born between 1946-1964, which means they’re now in their late 50s to late 70s. In 2034, when Social Security is set to start reducing benefits, the youngest will be 70 and the oldest will be approaching 90.

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Their age is the simplest reason that the cuts won’t hurt them as much. 

According to the Pew Research Center, tens of millions of baby boomers are already retired and millions more retire every year. Many won’t live to see the cuts and many others will enjoy the vast majority of their retirement before the cuts set in.

But age isn’t the only reason that boomers will dodge the worst of it. 

Boomers were the last generation of the private pension era. According to Brookings, those who collect both pensions and Social Security don’t need much more in the way of personal savings to get by in retirement. Also, they were mostly able to buy affordable homes before housing costs skyrocketed, and the college graduates among them largely dodged the era of crushing student loan debt.

On the other end of the spectrum is Gen Z. Like the boomers, their age will insulate them from most of the Social Security reduction fallout. Born between 1996-2012, the oldest Gen Zers are 26 and the youngest are 10. They’ll have most of their entire careers to adjust to the new retirement landscape, and they have the luxury of starting their working lives after the Great Recession and — for most of them — the pandemic. 

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Gen Xers Have Proven To Be Resilient, Determined Savers

Born between 1965-1980, Generation X first entered the workforce in the early ’80s when 401(k) plans had mostly replaced pensions. Many have been enrolled in employer-sponsored retirement plans for their entire careers and, according to the 21st Annual Transamerica Retirement Survey of Workers, have six figures in the bank. 

Now in their early 40s to late 50s, they’re in their prime earning years and still have time to catch up — and they’ve proven surprisingly resilient in the face of crisis.

In 2018 — 10 years after the Great Recession — they became the only generation in America to recover the wealth they lost during the 2008 crash, according to Pew. They displayed that same financial durability during the next catastrophe, too. 

According to CNBC, Gen X was the least likely of all generations to draw from their retirement plans during COVID-19 and the period of high inflation that followed. They’re currently cutting their discretionary spending to adapt, but they continue to save for retirement at the same rate as before.

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The Deck Has Been Stacked Against Millennials From the Start

Millennials will likely be hardest hit by the collapse of Social Security. 

Many entered the labor market during the dot-com bust at the dawn of the century and many others started their careers during the Great Recession, both of which were terrible job markets with diminished opportunities. They don’t have the pensions their parents did, but they do have the college debt burden and financial barriers to housing that their parents largely avoided. 

According to the Education Data Initiative, nearly 15 million millennials have student debt — more than any other generation — and Business Insider reports that more than 1 in 3 millennials can’t buy a home because of their college loans.

They’re entering peak homebuying age just as interest rates are at 20-year highs and the median home price is at a record high of roughly $358,000.

Their entire lives and careers have played out in an era of rapidly rising costs and stagnant wages — they weathered two recessions before they turned 40. 

During the run-up to the pandemic, the National Institute on Retirement Security released research showing that 2 out of 3 millennials had nothing saved at all. In 2021, as the pandemic waned, the Center For Retirement Research released data that showed millennials have a lower net wealth-to-income ratio than other generations.

According to the Transamerica study, nearly half of those who are saving for retirement were forced to dip into their funds to get by during the pandemic.

The last thing millennials need is a smaller Social Security check.

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for, a financial publication in the heart of Wall Street's investment community in New York City.
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