The Social Security Administration is reaching out to 20 and 30-somethings. Beginning this month, workers between the ages of 25 and 35 will receive a new insert with their Social Security statement. “This two-sided supplement provides younger workers with information about ways to save and invest, and also shows how saving even a little bit can make a big difference over time,” says Jason Fichtner, acting deputy commissioner of the Social Security Administration.
One aim of this mailing is to educate young people about the power of compounding interest. One example provided: $25 a week invested at 5 percent interest will grow to about $165,000 over 40 years. It also highlights Social Security’s disability benefits paid to injured workers and their families. A 20-year-old worker has a 3-in-10 chance of qualifying for disability benefits before reaching retirement age, the supplement points out.
The insert also seeks to reassure young people that Social Security will still be around when they retire – at least in some form. The Social Security trust fund will be depleted in 2041, under current law, based on a Social Security Board of Trustees estimate. But that doesn’t mean young people will get nothing. “Even if modifications to the program are not made, there would still be enough funds in 2041 from taxes paid by workers to pay about $780 for every $1,000 in benefits scheduled,” the pamphlet reads.
Workers age 55 and older already get an insert with their annual statement containing information about retirement timing, how work affects Social Security payouts, Medicare sign up information, and average life expectancy.
Tell us, will this insert be helpful to young people?