Social Security was supposed to be a safety net. To young Americans, it’s a broken promise
As the United States marks its 250th birthday, Straight Arrow is taking a fresh look at the institutions, systems and social contracts that shaped modern America — and the pressures now testing them.
Nearly a century ago, in the darkest hours of the Great Depression, America made a promise to its citizens.
Social Security, one of the cornerstones of President Franklin D. Roosevelt’s New Deal, would provide for those who were sick, disabled or simply too old to work.
“We can never insure 100% of the population against 100% of the hazards and vicissitudes of life,” Roosevelt said as he signed the Social Security Act into law on Aug. 14, 1935, “but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”
Nine decades later, Millennials and Gen Z are skeptical of America’s ability to keep that promise. Social Security benefits could face significant cuts in just six years if Congress fails to advance legislation addressing the system’s financial crisis.
But the nation’s youngest workers oppose higher mandatory federal payroll taxes to make Social Security solvent — and they’re counting on themselves, not the government, to fund their retirements.
Lillian Zhang, a 26-year-old Google employee and part-time online financial educator, is one of those workers. She teaches the 248,000 followers of her Instagram and TikTok accounts how to invest their money, travel affordably and make financially sound decisions.
“I think that’s a big concept in general that a lot of young people are aware of,” she told Straight Arrow. “Obviously, there is probably a subset of people who don’t have the means to save for retirement and probably not really thinking about it, but I think there’s a spectrum.”
About two-third of Americans under 30 think Social Security won’t exist when they retire, according to a survey by the Cato Institute, a libertarian think tank.
People aged 65 and older favored higher payroll taxes to keep Social Security alive, the survey found. Gen Z, with retirement more than three decades away, prefers reducing benefits to raising taxes to preserve a program they may never be able to take advantage of.
No single solution can fix the problem, but that shouldn’t keep Congress from finding a remedy, said Wendell Primus, a visiting fellow at the Brookings Institution.
“It can be rescued and it should be rescued,” he said. ”And it will be rescued.”
Social Security faced insolvency before
Trustees for the Social Security Administration warned recently that retirement benefits would begin to decline around July 1, 2032, with retirees seeing a 22% cut in their monthly payments. That could be devastating for millions of Americans — especially the one-fourth of retirees who receive 90% of their income from Social Security, according to the Center on Budget and Policy Priorities.
Resolving shortfalls in Social Security’s trust funds could be achieved through raising taxes, cutting benefits for current recipients or both. A cut to benefits would affect the nation’s 62.3 million retirees, while a payroll tax hike would affect more than 163 million workers.
“You either gotta raise taxes or cut benefits, and no taxpayer likes to have their benefit cut or their tax increased,” Primus said. “But that’s what it’s gonna take. There’s no magic bullet here.”
This isn’t the first time Social Security has faced insolvency. A series of amendments in 1983 — which increased payroll taxes, delayed cost-of-living adjustments and raised the retirement age — helped safeguard the safety net for more than four decades, according to the Social Security Administration.
In a 2022 Congressional Research Service report, economist Barry Huston urged lawmakers to act sooner than later to implement gradual changes needed to soften the blow. Older Americans are already adjusting by delaying their retirement to ensure larger benefits: New York Life, an insurance and financial services company, said in a September 2025 report that about 35% of adults have delayed or expressed intentions to delay their retirements because of to insufficient savings, inflation and a changing economy.
Primus pitched a solution during a Senate Budget Committee hearing in March. He proposed increasing the cap on earnings subject to payroll taxes to $360,000 over six to seven years, raising the payroll tax from 12.4% to 12.6% and increasing the full retirement age from 67 to 70 for men making more than $76,692 annually and for women making more than $50,688 a year.
The AARP, one of the nation’s leading advocacy organizations for retirees, staunchly opposes any benefit cuts or raising the retirement age.
AARP asked Congress this spring to “focus on solutions that will guarantee full, unreduced payments for today’s seniors and for future generations.”
The group endorsed plans from the National Academy of Social Insurance, a social welfare advocacy organization, to increase payroll taxes or redirect existing taxes to the program’s trust fund.
Martina McLennan, a spokesperson for the Bipartisan Policy Center, told Straight Arrow the country is past the point of finding a fix palatable to everyone.
“There are still solutions that are possible,” she said. “It’s just going to really take Congress to act sooner rather than later, because the longer they take to act, the harder those solutions are going to become and the more expensive they’re going to become.”
Lawmakers have introduced legislation to address pending benefits cuts, but the bills have languished in committees.
And now, the nation’s youngest workers are taking their retirement into their own hands.
“A lot of younger people are paying more attention to what’s available to them, tools and things to protect themselves,” said Zhang, the online financial educator.
Gen Z goes all-in Roth IRAs
An increasingly popular tool for young adults is a Roth IRA. It’s a retirement account that allows users to set aside money after they have already paid taxes, enabling them to withdraw their original investments penalty-free at any point.
Gen Z workers have increased their IRA contributions by 65% over the past year, according to Fidelity, a wealth management and investment firm. Fidelity said 21.4% of Gen Z workers are contributing to a Roth IRA.
“Roth is a fairly newer vehicle and has been marketed very heavily, especially on channels that young people tend to follow, such as TikTok and YouTube,” said Romina Bocci, director of budget and entitlement policy at the Cato Institute. “So some of this is also the rise of the influencer economy driving young people to invest in Roth accounts.”
Boccia told Straight Arrow that members of Gen Z have established themselves as risk takers and are more likely to gamble on prediction markets, sports betting and meme stocks.
A survey published in March by Northwestern Mutual found that 32% of Gen Z Americans and 24% of Millennials are either currently invested in, or are considering investing in sports betting and prediction markets. That’s head and shoulders above the 10% of Gen X and 3% of Baby Boomers who say the same thing.
That doesn’t mean Gen Z workers aren’t saving for retirement. Northwest Mutual’s annual survey into retirement data found that the average American started saving for retirement at age 31, but Millennials and Gen Z workers began even earlier, at 28 and 22 years old, respectively.
According to Fidelity’s review of 25.6 million 401(k) participants, Baby Boomers have an average retirement savings of $260,300, Gen X has $215,600, Millennials have $82,600 and Gen Z has $18,000.
Zhang has been contributing to her retirement for several years already.
“I started with the Roth IRA when I started my full-time employment,” she told Straight Arrow. “I started on a 401(k) as well as an HSA, which is a great retirement vehicle as well. I also have another business that I run independently, so I have a solo 401(k) for that.”
Boccia said it makes sense for younger people to use Roth IRAs to put away extra money they have now for later.
Knowing her money grows passively over time in her investment accounts appealed to Zhang. She’s since shared that information with her followers.
Despite the uncertainty over Social Security’s future, Zhang isn’t overly concerned. She advised others her age to disregard the promise of a government-backed retirement and to take an aggressive approach to their financial futures.
“Prepare for the worst-case scenario,” she said. “Regardless of what the government decides to do, I know that I’m preparing myself to set myself up for success.”
Round out your reading
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Ella Rae Greene, Editor In Chief
