# Social security and the young



## Wontactmyage (Jun 15, 2022)

As I grew up and started my working life it was under my understanding that Social Security is tied to my years of paying into SS via my employment. Has that changed? The longer I was employed, I was building towards my retirement monies plus keeping SS $ for my predecessors. The longer I waited to retire would give me more money and SS made monies for all.  It is my understanding that young people coming into the work force are not.

Story: We have a young man (40s) who has a step daughter (21) that has not kept a job since 18 (minimum of three years of potential SS dollars) for more than a few months at a time, not going to college or trades school or furthering her education in any way. If she (her boyfriend too) continues at this pace along with her peers, will not SS be in crisis? “We” you and I depend on the younger people to enter the workforce to ensure that we and them have SS available. This attached fact sheet shows many young people are receiving SS currently. They are not shoring up SS so retired peoples must share monies.
I have wanted to share this thought to my 40’ish man but can’t find a way to say it without being critical of the stepdaughter however he might not see it as it might effect him. 

BTW this man has worked since he was 19, rarely misses a day and has worked at his same job since he graduated. Has so much seniority he can take multiple weeks off at a time. He works at a distribution center. 

https://www.ssa.gov/news/press/factsheets/young-alt.pdf


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## Myquest55 (Jun 15, 2022)

It sounds as if that young person's parents have enabled her and certainly not educated her on the responsibilities of adulthood.  Rest assured that my three sons and one daughter-in-law are all gainfully employed and paying into SocSec on a regular basis.


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## Alligatorob (Jun 15, 2022)

Interesting fact sheet, thanks!


Wontactmyage said:


> As I grew up and started my working life it was under my understanding that Social Security is tied to my years of paying into SS via my employment. Has that changed?


I don't think so, your benefits are tied to how much and for how long you contribute.  Not sure of the formula, but its easy to find on the Social Security website.

One thing that is concerning in the fact sheet is how many young people are drawing Social Security, mostly for disability.  If too much of that happens it will be a big draw on the fund.


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## Lethe200 (Jun 15, 2022)

SocSec uses current premiums to add to the SocSec Fund which pays benefits to those who are eligible after age 62. Eligibility for SocSec is determined by 10 years (40 qtrs total) of earnings where SocSec premiums were deducted, and benefits are based on the highest 35 years of earnings.

Many people pay into SocSec but never get to collect. I know a guy who has 39 qtrs and who refused to take a job offer that would have enabled him to qualify with one more qtr worked. Yes, he's an idiot, but that's his choice I guess.

If you had Googled for some SocSec facts first, you could see that only 3% of Americans are on SS Disability, and there are only 2.8M young people being paid benefits. Conversely, *89% *of people aged 21-64 worked in covered employment in 2020, meaning they paid benefits.

Now, it's true there are fewer workers to support more elderly benefits (we Boomers are just living too long, LOL - all that jogging is causing the government problems!). But there are multiple solutions to that problem:

Decreasing benefits. Matching benefits paid to premiums coming in would mean a 25% reduction in payouts to existing retirees.
Raising premiums. It's likely this will happen. It's been done before.
Raising retirement age, in phases. Also likely; also been done before.
And despite what some like to claim, if you are not a legal citizen you can't claim SocSec. Many folks don't understand how contract workers are paid. Did you know that if you hire someone to clean your house and pay them even as low as $5/hr, you are responsible for deducting income tax and SocSec from your payment? A lot of "grey labor" never pays in, but also never can make a claim.

There's an argument that "well, illegal aliens use fake SocSec #s to get jobs", which is true. But they can't claim SocSec using it. Whatever # was used, the money collected goes into the SSA Fund (which, btw, is entirely self-funded and is NOT part of the U.S. Federal Budget). If it's a stolen # and someone is already receiving their own benefits, receiving a duplicate claim will start an SSA investigation.

The disabled, and children of the disabled, receive SSI under the definition of *Social Security Disabled. *Children receive it until their majority, and then benefits end. It is not easy to get SS disability: 80+% of all claims are denied on the first application. It takes persistence to get SSD approval; it has been known to take over a year in process.

Hope that all makes sense, and is helpful.


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## Don M. (Jun 15, 2022)

If present trends hold, SS will be in trouble by 2035....at the latest.  As more people are living longer, the SS funds are Not keeping up.  Congress is going to have to make some changes in the not-too-distant future to maintain this program for future generations.  The most common "solutions" seem to be Means Testing, where the benefits are reduced to those who have other sources of incomes, and/or raising the cap on SS taxes for those making substantial wages.  Either way, action needs to be taken soon, or many of today's younger people will not get much.


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## StarSong (Jun 15, 2022)

Wontactmyage said:


> Story: We have a young man (40s) who has a step daughter (21) that has not kept a job since 18 (minimum of three years of potential SS dollars) for more than a few months at a time, not going to college or trades school or furthering her education in any way. If she (her boyfriend too) continues at this pace along with her peers, will not SS be in crisis?


I wouldn't worry too much about the work record of one 21 year old.  We all grow up and most of us figure out that we need to work in order to support ourselves and but what we need and want.

@Lethe200's response covered the rest quite well.


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## OneEyedDiva (Jun 15, 2022)

Social Security is already in crisis. The SS administration has said that although it won't be insolvent, it will be necessary to reduce benefits *across the board* by about 23% and that is likely to start around 2034. Some people here didn't want to believe it will affect us because we who are already collecting are "grandfathered" in. But from what I understood, that is not how this is going to work! When I first started reading about the proposed reduction in benefits a few years ago, analysts (not SSA) projected to be 25%.  Less young people contributing to the program is one of the factors that is causing a shortage in the program. Here is an article that explains reasons for the shortfall.
https://www.fool.com/retirement/2020/10/04/whos-ready-for-a-24-cut-to-social-security-benefit/
Here's another updated article about the proposed cut. The SS website posted about this proposed cut on their website but only left it up briefly and I wondered why that was.   
https://www.fool.com/retirement/2022/06/12/will-social-security-cut-benefits-3-things-to-know/


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## Aunt Bea (Jun 16, 2022)

The old three-legged stool of retirement is getting pretty wobbly.

Social Security needs to be shored up in order to continue and most major employers have eliminated traditional pension plans.

The only leg any of us have control over is personal savings.



Tell your kids and grandkids to save their money and buckle up for a bumpy ride.


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## StarSong (Jun 16, 2022)

OneEyedDiva said:


> Social Security is already in crisis. The SS administration has said that although it won't be insolvent, it will be necessary to reduce benefits *across the board* by about 23% and that is likely to start around 2034. Some people here didn't want to believe it will affect us because we who are already collecting are "grandfathered" in. But from what I understood, that is not how this is going to work! When I first started reading about the proposed reduction in benefits a few years ago, analysts (not SSA) projected to be 25%.  Less young people contributing to the program is one of the factors that is causing a shortage in the program. Here is an article that explains reasons for the shortfall.
> https://www.fool.com/retirement/2020/10/04/whos-ready-for-a-24-cut-to-social-security-benefit/
> Here's another updated article about the proposed cut. The SS website posted about this proposed cut on their website but only left it up briefly and I wondered why that was.
> https://www.fool.com/retirement/2022/06/12/will-social-security-cut-benefits-3-things-to-know/


Benefits will be cut *IF and only IF* these shortfalls aren't addressed by Congress.


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## Ruthanne (Jun 16, 2022)

Some young people get SS because of disability and are not able to work.  They deserve compassion not unacceptance.  Unless you've walked in their shoes it's easy to judge and condemn.  Many would like to work but can't because of severe disability.


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## Murrmurr (Jun 16, 2022)

I echo @Alligatorob 

Plus congress gave themselves the right to dip into SS funds under certain circumstances, then "pay it back".

A lot of people die before getting old enough to draw their SS benefits....just a point to consider. I have no idea if it balances out, but I don't think so.


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## OneEyedDiva (Jun 17, 2022)

StarSong said:


> Benefits will be cut *IF and only IF* these shortfalls aren't addressed by Congress.


Honestly Star, politicians had to have known for years that the fund was getting low because I've been reading analysts reports about it for years. Yet nothing has been done. Some feel that Congress will act at the last minute to resolve the problem. I sincerely hope those people are right but I wouldn't be surprised if they aren't. Politicians in charge of the fate of those less fortunate (not as wealthy as they are) don't seem to give a damn about our money unless it somehow also affects their bottom line. I doubt any of them need to rely on SS to live a comfortable lifestyle.


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## StarSong (Jun 17, 2022)

OneEyedDiva said:


> *Honestly Star, politicians had to have known for years that the fund was getting low because I've been reading analysts reports about it for years*.


True, but politicians rarely act until we hit crisis mode. Foolish, I grant you, but that's the way of those in government.  


OneEyedDiva said:


> Politicians in charge of the fate of those less fortunate (not as wealthy as they are) don't seem to give a damn about our money unless it somehow also affects their bottom line. I doubt any of them need to rely on SS to live a comfortable lifestyle.


Agreed.  However, they do care about being re-elected.


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## Jeni (Jun 17, 2022)

_Social Security is designed to replace *40% of workers pre-retirement income in retirement.* However, the way that Social Security is calculated means that the amount you actually receive in retirement may be much higher or lower than that percentage.
Specifically, Social Security begins its calculation by coming up with your average indexed monthly earnings (AIME). _


_Your Social Security benefit is decided based on your lifetime earnings and the age when you retire and begin taking payments._
_Your lifetime earnings are converted to a monthly average *based on the 35 years in which you earned the most,* adjusted for inflation._
_Those earnings are converted to a monthly insurance payment based on your full retirement age._
_Your monthly payment will decrease or increase if you retire earlier or later than your full retirement age._

the above items  are from a Motley Fool site.....

I agree young people NEED to be advised on the formula.

Example: if they do NOT have 35 years .....only 30  .......... five years in equation are $0 which really lowers the calculation.
Many have found this out way too late ..... and will be working well past average retirement.


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## Wontactmyage (Jun 17, 2022)

Ruthanne said:


> Some young people get SS because of disability and are not able to work.  They deserve compassion not unacceptance.  Unless you've walked in their shoes it's easy to judge and condemn.  Many would like to work but can't because of severe disability.


Not sure where that came up in this thread. As many have said here- peace, love, kindness for all. I will never ask anyone to walk in my shoes (life), stand tall and carry on any way you can.


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## Happy Heart (Jun 26, 2022)

OneEyedDiva said:


> Social Security is already in crisis. The SS administration has said that although it won't be insolvent, it will be necessary to reduce benefits *across the board* by about 23% and that is likely to start around 2034. Some people here didn't want to believe it will affect us because we who are already collecting are "grandfathered" in. But from what I understood, that is not how this is going to work! When I first started reading about the proposed reduction in benefits a few years ago, analysts (not SSA) projected to be 25%.  Less young people contributing to the program is one of the factors that is causing a shortage in the program. Here is an article that explains reasons for the shortfall.
> https://www.fool.com/retirement/2020/10/04/whos-ready-for-a-24-cut-to-social-security-benefit/
> Here's another updated article about the proposed cut. The SS website posted about this proposed cut on their website but only left it up briefly and I wondered why that was.
> https://www.fool.com/retirement/2022/06/12/will-social-security-cut-benefits-3-things-to-know/


Do you know that investment companies will use fear to push their products?


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## StarSong (Jun 26, 2022)

Happy Heart said:


> Do you know that investment companies will use fear to push their products?


Ya' think?  Companies across the spectrum employ emotional triggers to push their products.  Sports car ads almost always had gorgeous, scantily clad women draped over the cars.    

Capitalism at its finest.


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## MarciKS (Jun 26, 2022)

StarSong said:


> I wouldn't worry too much about the work record of one 21 year old.  We all grow up and most of us figure out that we need to work in order to support ourselves and but what we need and want.
> 
> @Lethe200's response covered the rest quite well.


Mommy and daddy don't live forever to support them.


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## StarSong (Jun 26, 2022)

MarciKS said:


> Mommy and daddy don't live forever to support them.


Yes.  And most people mature and want to be self sufficient.  I'm not the same person I was at 21. Nor are most people.


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## AnnieA (Jun 26, 2022)

Ruthanne said:


> Some young people get SS because of disability and are not able to work.  They deserve compassion not unacceptance.  Unless you've walked in their shoes it's easy to judge and condemn.  Many would like to work but can't because of severe disability.



My vaccine injured nephew will never work, nor will many in his situation now that we're approaching a quadrupled childhood vaccines and boosters schedule for children over the past 30 years.


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## StarSong (Jun 26, 2022)

AnnieA said:


> My vaccine injured nephew will never work, nor will many in his situation now that we're approaching a quadrupled childhood vaccines and boosters schedule for children over the past 30 years.


I've begged my son and DIL to space out their infant's vaccines despite what the doctors recommend.  There's no hurry to get them all done.

What a nightmare for your family, @AnnieA. I'm so sorry this happened to him.


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## AnnieA (Jun 26, 2022)

StarSong said:


> I've begged my son and DIL to space out their infant's vaccines despite what the doctors recommend.  There's no hurry to get them all done.
> 
> What a nightmare for your family, @AnnieA. I'm so sorry this happened to him.



Not only space them, but eliminate redundant boosters.  

He's 18.  We love the young man he is, but still mourn the child who had 20+ words and lost all but one word in less than two week's time.  It's especially sad right now as kids his age are entering college this fall and we can't help but wonder what might have been.


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## Lethe200 (Jun 27, 2022)

Murrmurr said:


> I echo @Alligatorob
> 
> Plus congress gave themselves the right to dip into SS funds under certain circumstances, then "pay it back".


Yes, Congress has the right to do that - but the money goes back into the SS fund in the form of Treasury certificates. That process is legally mandated; they do not get to 'pay it back' at their leisure whenever they feel enough tax $$$ are coming in so Congress can spare some.

Essentially the US Government owes itself money, but that's actually not unusual.


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## Murrmurr (Jun 27, 2022)

Lethe200 said:


> Yes, Congress has the right to do that - but the money goes back into the SS fund in the form of Treasury certificates. That process is legally mandated; they do not get to 'pay it back' at their leisure whenever they feel enough tax $$$ are coming in so Congress can spare some.
> 
> Essentially the US Government owes itself money, but that's actually not unusual.


Yes, that's why I put "pay it back" in quotes.


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## David777 (Jun 27, 2022)

There isn't any excuse for taxpayers to not understand their future SS benefit because the SS Administration either mails a paper report if they have your current address or an online report if one has opened a SS account, to taxpayers each year.  If one has been paying federal or state taxes, the IRS will have that information. I was receiving those reports for at least a couple decades and before retirement had put my data on a custom Excel sheet that did all the calculations.   A person with no reports or doesn't understand, just needs to look in the mirror to see the problem.

One recent year I was a self employed contractor, the SSA somehow screwed up showing I made $0 that year even though I mailed in all my quarterly taxes that they acknowledged at the time.  So went down to a local office, got an interview, opened a case, but never received a peep or any info afterward. Even though I got there when the office opened, had to wait a few hours as room was full of immigrants, old feeble seniors,  and other disability seekers with a long line outside the door. Not something I wanted to bother with again.

https://blog.ssa.gov/get-your-social-security-benefit-statement-ssa-1099/

https://www.ssa.gov/myaccount/assets/materials/statement-redesign-si-bw.pdf

The SSA example statement:


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