Generation Z and Millennials Prioritize the 401(k) Over Social Security

fundssociety.com ^

[DIRTYSECRET]

More than half (58%) of Generation Z and Millennial participants with 401(k) plans expect their personal retirement accounts to be their main source of income in retirement.

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TOPICS: Chit/Chat
KEYWORDS:

[DIRTYSECRET]

Ok people. The OLDEST millennial is 45-a time to think retirement. They've known of SSI's shortcomings all along but paid no attention when W tried to privatize part of it 20 years ago. Had it happened today's problems would not be there. They let the democrats get away with defending their sacred cow as is. That was then, this is now. Millennials are now in position to put pressure on a system that's not working. Raising the taxable income for SSI is kicking the can-they know it.

What happens between now and when those with Trump accounts turn 18? The kids will soon know more about saving than their parents. The trick will be how to pay those over 45 who are still invested in the current system. Any new idea that takes care of them will have to come with the caveat that the entire SSI program will wither on the vine in 40 years.

[ansel12]

Good for them, they will have more money when they retire than a lot of older generations, of course the corporate and career types don’t change much from generation to generation, but this will make a difference in the other groups.

[DIRTYSECRET]

The issue is how to replace SSI entirely. Throwing the old out in the street will be the defenders response but we just might have the support of the younger generation now. Better late than never.

[TangoLimaSierra]

All I can say is that the lottery has really let me down in my retirement plan.

[Vermont Lt]

So, I guess the reading materials on 401(k)s worked. These SHOULD be your primary source of retirement income.

SS was NEVER meant to be the primary source. It was always a supplemental source to keep the elderly out of poverty.

[Libloather]

Will there be a 401k if they don’t work?

[TheThirdRuffian]

My 21 year old daughter is maxing out her Roth IRA.

I’ve always done the same. SS is a scam to steal from high earners and give to others and always has been. The Ponzi scheme is collapsing.

[al_c]

Kudos to them. Smart move.

[Gunslingr3]

Raising the taxable income for SSI is kicking the can-they know it.

It's not that a tax increase is 'kicking in the can', it's that the system is already a net negative on a dollar in, dollar out basis for those born after 1975.

A tax increase will just make the system more a money loser for most participants.

What's needed are actual savings, not a government run Ponzi.

[TheThirdRuffian]

“ SS was NEVER meant to be the primary source. It was always a supplemental source to keep the elderly out of poverty”

No it was meant to prevent inflation by stealing 16% of wages and feed the government pig. It was sold as a retirement plan.

[LukeL]

I have been trying to get hurt in a federal building.

[Gunslingr3]

SS was NEVER meant to be the primary source. It was always a supplemental source to keep the elderly out of poverty.

This is why I'd support means testing over tax increases to deal with the projected ~20% outlay shortfall.

The elderly are America's richest cohort, we don't need to have higher taxes (or go deeper in debt) to write checks to all of them. Especially in light of the 40 trillion in debt they're leaving behind.

[Magnum44]

Competitive market does work. Pensions (I know, now a thing of the past) came about because companies competed for employees. Same today with 401k’s. Add in other alternatives like IRA’s and you dont need to ‘replace’ SS, just transition to market alternatives.

[Gunslingr3]

No it was meant to prevent inflation by stealing 16% of wages and feed the government pig.

There's no inflation impact from the Social Security program. Taxes paid to the program in excess of outlays have always been invested in government debt.

That is inflation neutral. No money is created by the process, nor destroyed.

The program was created to supplement the income of people who had lived beyond the current life expectancy:

When Social Security was created in 1935, average life expectancy at birth was about 58 to 60 years for men and 62 to 64 for women, while the full retirement age was set at 65

[oldskoolwargamer2]

I wish I had been able to invest my SS in my 401K account, would have been retired already.

[Tell It Right]

The issue is how to replace SSI entirely. Throwing the old out in the street will be the defenders response but we just might have the support of the younger generation now. Better late than never.

My suggest is to ALLOW people to OPT OUT of SS. Not force people to. But allow it.

If you've paid into it, you'd get the option to take a lump sum out. If you're paying into it, you get the option to quit contributing to it. Most people would opt out, better to have money now than later.

But, one may ask, if many people opt out how would we pay current retirees? And where would the money come from for everyone who chooses to receive a lump sum? Answer: Yet another big spending bill, only this one is to stop kicking the snowball down the road (cans don't get bigger as they're kicked down the road) until it becomes an even bigger snowball than it already is. The main thing is it'll prevent, for the most part, the SS ponzi scheme from being an even bigger problem later. It'll be only as big as the few who opt to stay in SS.

[Bernard]

The trick will be to bullet-proof these savings and growth from accumulated wealth taxes. Yes, I know nobody is talking about early taxing this money while it is still invested, but living in Illinois has shown that government is always looking for ways to increase revenue to cover spending; especially when the spending is out of control and not focused on increasing the existing revenue base.

[desertfreedom765]

Any sane person prioritizes their 401k/ira investments over social security, as it is what you can control over what you have less control over.

However that doesn’t mean that most people don’t depend on SS to help in old age. (Including many conservatives).

I find it interesting that their are so many articles/threads by conservatives talking about getting rid of SS, means testing it or raising the retirement age, right before the midterm elections.

It’s almost as if they are really trying to help the democrats win the mid-terms.

[Sequoyah101]

401 is fine ROTH is better. Balance contributions if you can. Any excess taxable savings should probably go to ROTH. You will be grateful when it comes time for RMD and other distributions.

SSA just needs to phase out. It may have been an ok idea once but it has been abused and ruined by politicians.

401 and Trump accounts will have down years, nobody can predict when and our currency is fighting against real value full time.

[Alberta's Child]

GenX was the first to have 401(k) plans widely available from the start of their working careers. Their kids have seen how successful they’ve been, and are acting accordingly.