Social Security just celebrated its 80th birthday. Did you get one of the last pieces of cake? Guess what? According to the government, the last piece will be served sometime in 2034. And this makes another 2015 birthday more meaningful. In October 2015, we’ll celebrate 30 years of Marty McFly and that whole Back to the Future craze. In a weird way, the second part of this famous Michael J. Fox trilogy tells us all we need to know about Social Security and the millennials.
In that first sequel, Marty and Doc Brown went to the future and then to the past. But not before the older Biff snuck back to 1955 and gave his younger self a sports almanac that contained all the winning teams through 2015. Armed with this future insight, the young Biff scores big on the gambling circuit and changes the world.
Imagine if those 20-somethings (i.e., the younger baby boomers) in 1983 had held the same steadfastness that today’s millennials do. They’d probably not be as rich as Biff, but the world today would be a changed placed — and probably for the better.
But more on that in a second. Let’s return to the thoughts and feelings about the millennial generation as it pertains to their future retirement and Social Security. We now know the fabled government-run defined benefit program will run out of money in 2034, a year short of its 100th birthday. But, we always knew that, didn’t we? Some say the politicians will save it, and some say, to save it, politicians have no choice but to destroy it. Given this uncertainty, determining the best way to incorporate Social Security into an individual’s retirement plan remains an art, at best, with the paint mixture changing depending on one’s generation. (To see how this interplay between accounting and politics might work, read “How Should a Fiduciary Treat Social Security in Retirement Planning – A Generational Overview,” FiduciaryNews.com, August 25, 2015.)
Rather than sit back and play the passive victim to some future sequence of elections, millennials have come to the same conclusion all younger generations eventually come to: “Screw this, I’m doing it myself.”
A recent survey indicates 64 percent of millennials feel Social Security won’t be around by the time they retire (for those of you counting, the millennials will start retiring around the year 2060). Sure, there may be a program labelled “Social Security” in existence then, but no millennial in their right mind assumes it will be the same as their father’s (let alone their grandfather’s) Social Security. The bottom-line for millennials is, when it comes to planning their own retirement, they just can’t count on Social Security. As a result, they’ve added together their realization that neither the government nor somebody else’s business will look out for their own best interests; thus, they’ve accepted they are the best ones to watch out for themselves.