The under-30 crowd isn’t feeling optimistic about retirement — and they’re willing to forego Social Security benefits rather than paying more into the program now.
A stark generational divide is highlighted by the results of a recent survey from the Cato Institute (1).
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Only 34% of Gen Z respondents believe Social Security will exist when they retire. They also anticipate significant benefit cuts, with 78% reporting they expect to receive less than the full scheduled benefit when it comes time for them to retire. They were also nearly eight times more likely than today’s retirees to say they support reducing benefits (53%) over raising taxes to fix the program’s finances.
On the flipside, boomers are in favor of taxing younger workers to maintain current benefit levels for retirees, with 89% of respondents 65 and over saying benefits should be protected even if that means higher taxes on younger workers. Only 6% were in favor of reducing benefits for current retirees to protect the future of the program.
With big differences in how the generations view the Social Security crisis and its remedies, and the program set to run out of funds by 2033 (2), Americans will have some tough choices to make about policy changes, tax increases and reforms to the longstanding program.
Here’s what you need to know about potential changes to Social Security, and how you can secure your retirement regardless of whether the program continues or not.
The current state of Social Security
Seventy million Americans currently rely on the Social Security program, which not only helps to replace income postretirement, but also helps those with disabilities and those who are widowed or orphaned. With the current shortfalls to the program, retirees will only receive 77% of their full benefits after 2033, warns the Social Security Board of Trustees (2).
Of all recipients, 11 million Americans with disabilities rely on the Social Security program, according to The Alliance for Responsible Citizenship (3). Almost half need their benefits to make up 50% or more of their family income, and 18% of recipients rely on benefits for nearly all of their income. Social Security Disability Insurance recipients are twice as likely to be poor as other working-age Americans, according to the Social Security Administration (4).
For retirees, a 2024 survey by The Senior Citizens League found that 67% of Social Security recipients rely on the program for more than half their income. Of those, 27% are solely dependent on their monthly check (5).
Therefore, cuts to benefits could have catastrophic effects for millions of Americans who are already struggling financially.
A number of program changes have been discussed to ameliorate the program and ensure continued benefit dispersals. The Peter G. Peterson Foundation reports (6) that Brookings proposes a number of changes (7), including an increase to taxable wages, as right now only 80% of wages are eligible for Social Security taxes, and increasing the payroll taxes for all individuals by 0.2%.
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Also proposed, increasing the full retirement age by two years for top earners, so that the program can continue to pay benefits to those who need them more. Cutting the dependent retiree spouse benefit and benefits for children of a retired parent was also suggested (7). In spite of many proposals to improve the program and ensure its survival, so far no large-scale efforts have received bipartisan support from Congress, the only body that can effect change by law.
How to prepare for retirement without a social safety net
Younger Americans are wary of Social Security tax hikes without guarantees that the program will be fully available to them when they reach old age. The Cato Institute survey found that “if current workers would eventually get back less than they paid in,” 60% of Gen Z would oppose tax hikes, while 52% of today’s elderly would be in favor (1).
No matter how the future of the program plays out, today’s young workers need to prepare for a retirement that doesn’t rely on supplemental income — and may need to budget effectively to account for increased taxes.
In order to prepare effectively for retirement, younger generations today should consider:
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How much money they’ll need yearly in retirement. A common rule of thumb is to plan for 70 to 75% of preretirement income.
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Making the maximum contributions to your 401(k) and IRA. The limits for 2026 are $24,500 and $7,500 respectively (8).
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Practice good budgeting now. Learning to stick to a budget and live on less can prepare you for living on a fixed income in retirement.
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Diversify your investments. While most Americans have their retirement accounts tied to the stock market through 401(k) and IRA investments, diversification, such as via an index fund, can ensure that your risk is spread and your investment value won’t dip too much directly before retirement.
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Open a health savings account. This tax-advantaged account can help you to offset medical costs in retirement.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Cato Institute (1); Social Security Board of Trustees (2); The Alliance for Responsible Citizenship (3); Social Security Administration (4); The Senior Citizens League (5); Peter G. Peterson Foundation (6); Brookings (7); IRS (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.