Few issues unite millennials like the future of Social Security. Overwhelmingly, they're convinced it doesn't have one.
A recent Transamerica survey found that 80% of millennials, defined in the survey as people born between 1979 and 2000, worry that Social Security won't be around when they need it. That's not surprising — for years, they've heard that Social Security is about to "run out of money."
The language doesn't match the reality. Social Security benefits come from two sources: taxes collected from current workers' paychecks and a trust fund of specially issued U.S. Treasury securities. This trust fund is scheduled to be depleted in 203 4, but the system will still collect hundreds of billions in payroll taxes and send out hundreds of billions in benefit checks. If Congress doesn't intervene, the system can still pay 77% of projected benefits.
In any case, chances are good Congress will intervene, as it did in 1977 and 1983, to strengthen Social Security's finances. Social Security is an enormously popular program with bipartisan support and influential lobbies, including the immensely powerful AARP, looking out for it.
Still, millennials who believe Social Security won't be there for them could make bad choices about their retirement savings. The worst outcome would be if they didn't save at all, convinced retirement was hopeless. But any of the following myths could cause problems.
'I CAN SAVE ENOUGH TO RETIRE EVEN WITHOUT SOCIAL SECURITY'
Good luck with that.
Currently, the average Social Security benefit is just under $1,500 a month. You would need to save $400,000 to generate a similar amount. (That's assuming you use the financial planners' "4% rule," which recommends taking no more than 4% of the portfolio in the first year of retirement and adjusting it for inflation after that.)
And that may be underestimating the value of Social Security. The Urban Institute estimates that many average-income single adults retiring between 2015 and 2020 will receive about $500,000 in benefits from the system while couples will receive roughly $1 million. Millennials, meanwhile, are projected to receive twice as much: about $1 million for an average-income single adult and $2 million for a couple.
Trying to save enough to replace 100% of your expected Social Security benefit might well be impossible, and could cause you to stint on other important goals such as saving for a child's education or even having a little fun once in a while.
A more realistic yet still cautious approach would be to assume you'll get 70% to 80% of what your Social Security statement projects, says Bill Meyer, founder of Social Security Solutions, a software tool for Social Security claiming strategies.
"Somewhere between a 20% to 30% reduction seems like the worst-case scenario to me," Meyer says.
'I CAN IGNORE MY SOCIAL SECURITY ACCOUNT'
Your future Social Security check will be based on your 35 highest-earning years. To get what you're owed, however, your earnings need to be reported accurately and that doesn't always happen. Employers may not report the correct information to Social Security, or may not report your earnings at all. You can correct those errors if you catch them in time. Fixes could be difficult decades from now, when the employer may have gone out of business and needed documents may be unavailable.
Millennials may be more exposed to errors than previous generations because they tend to change jobs more, Meyer says. That makes it important for them to check their earnings records, which they can do by creating an account on the Social Security Administration's website.
"Every two to three years, you should log on and make sure that your earnings are reflected correctly," Hayes says.
'IF IT'S STILL AROUND, I SHOULD GRAB IT AS SOON AS POSSIBLE'
Millions of Americans make this mistake every year, locking in permanently reduced payments and potentially costing themselves up to $250,000 in lost benefits by claiming too early. But Congress is highly unlikely to cut benefits for those in retirement or close to retirement age, Meyer notes.
Instead, there likely will continue to be incentives for delaying your Social Security claim. Currently, benefits increase by about 7% to 8% for each year you wait to apply after age 62 until benefits max out at 70.
Working an additional few years also can compensate for low- or no-earning years earlier in millennials' careers, when incomes may have been depressed by recession or gig-to-gig work.
"A higher-earnings year can replace a lower one," Meyer says. "You can fill in those gaps."
This column was provided to The Associated Press by the personal finance website NerdWallet. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of "Your Credit Score." Email: lweston@nerdwallet.com. Twitter: @lizweston.
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NerdWallet: When can I retire? http://bit.ly/nerdwallet-when-to-retire
PARIS (AP) —
Reuters photographer Mohammed Salem captured this year’s prestigious World Press Photo of the Year award Thursday with a depiction of loss and sorrow in Gaza, a heartrending photo of a Palestinian woman cradling the body of her young niece. The photograph, taken in Khan Younis just days after Salem’s own child was born, shows 36-year-old Inas Abu Maamar holding five-year-old Saly, who was killed along with her mother and sister when an Israeli missile struck their home.
Salem, who is Palestinian, described this photo filed Nov. 2 last year, as a “powerful and sad moment that sums up the broader sense of what was happening in the Gaza Strip.”
The image ”truly encapsulates this sense of impact,” said global jury chair Fiona Shields, The Guardian newspaper's head of photography. “It is incredibly moving to view and at the same time an argument for peace, which is extremely powerful when peace can sometimes feel like an unlikely fantasy,” she added.
The World Press Photo jury praised the shot’s sense of care and respect and its offering of a “metaphorical and literal glimpse into unimaginable loss.”
This is not the first time Salem has been recognized for his work on the Israeli-Palestinian conflict; he received a World Press Photo award more than a decade ago for another depiction of the human toll of conflict in the Gaza strip.
In the three other global categories announced Thursday, South Africa’s Lee-Ann Olwage won Photo Story of the Year for her touching series “Valim-babena,” featured in GEO magazine. The project focused on the stigmatization of dementia in Madagascar, a topic she explored through intimate portraits of “Dada Paul” and his family. Lack of public awareness surrounding dementia means that people displaying symptoms of memory loss are often stigmatized.
In the series, “Dada Paul,” who has lived with dementia for 11 years, is tenderly cared for by his daughter Fara. One of the standout images in the series shows him preparing for church with his granddaughter Odliatemix, capturing moments of normalcy and warmth amidst the challenges of dementia.
Photographer Alejandro Cegarra, a Venezuelan native who migrated to Mexico in 2017, won the Long-Term Project award for “The Two Walls,” published by The New York Times and Bloomberg. Cegarra’s project, initiated in 2018, examines a shift in Mexico’s immigration policies, which have moved from being historically open to enforcing strict regulations at its southern border. The jury said the photographer's perspective as a migrant gave it a “sensitive," human-centered perspective, according to a press release.
Julia Kochetova of Ukraine won the Open Format award for “War Is Personal.” The project stood out from coverage of the ongoing conflict by offering a personal look at the harsh realities of war. On a dedicated website, she merged traditional photojournalism with a diary-like documentary style, incorporating photography, poetry, audio clips and music.
The Associated Press won the Open Format award in the regional Africa category with the multimedia story “Adrift,” created by journalists Renata Brito and Felipe Dana. The story investigates the fate of West African migrants who attempted to reach Europe via a treacherous Atlantic route but ended up on a ghost ship discovered off Tobago. The team’s compelling use of photography, cinematography and detailed narrative, enhanced by expert design and multimedia elements, highlights the perils faced by migrants and the human stories behind global migration issues.
The Associated Press' Ebrahim Noroozi won the Asia Stories award for his series “Afghanistan on the Edge,” which documents the country since the Taliban took over in August 2021.
World Press Photo is an independent, nonprofit organization based in the Netherlands, founded in 1955.
This image provided by World Press Photo is part of a series titled Afghanistan on the Edge by Ebrahim Noroozi, Associated Press, which won the World Press Photo Asia Series category and showsAn Afghan refugee rests in the desert next to a camp near the Torkham Pakistan-Afghanistan border, in Torkham, Afghanistan, Friday, Nov. 17, 2023. A huge number of Afghans refugees entered the Torkham border to return home hours before the expiration of a Pakistani government deadline for those who are in the country illegally to leave or face deportation. (AP Photo/Ebrahim Noroozi)
This image provided by World Press Photo is part of a series titled Afghanistan on the Edge by Ebrahim Noroozi, Associated Press, which won the World Press Photo Asia Series category and shows : Since the chaotic Taliban takeover of Kabul on Aug. 15, 2021, an already war-devastated economy once kept alive by international donations alone is now on the verge of collapse. There isn't enough money for hospitals. The World Health Organization is warning of millions of children suffering malnutrition, and the U.N. says 97% of Afghans will soon be living below the poverty line. Three Afghan internally displaced children look with surprise at an apple that their mother brought home after begging, in a camp on the outskirts of Kabul, Afghanistan, Thursday, Feb 2, 2023. (AP Photo/Ebrahim Noroozi)
This image provided by World Press Photo is part of a multimedia project by Associated Press' Renata Brito and Felipe Dana titled Adrift, won the World Press Photo Africa Regional Winner Open Format category and shows a mortuary technician opening the door of a refrigerator used to store the remains of migrants recovered from inside the Mauritania boat that appeared drifting near the island of Tobago, in Scarborough, Trinidad and Tobago, Tuesday, Jan. 25, 2022. In May 2021 a boat from Mauritania full of dead men was found off the coast of the Caribbean Island of Tobago. Who were these men and why were they on the other side of the Atlantic Ocean? Two visual journalists sought answers, uncovering a story about migrants from West Africa who seek opportunity in Europe via an increasingly popular but treacherous Atlantic route. (AP Photo/Felipe Dana)
This image provided by World Press Photo is part of a multimedia project by Associated Press' Renata Brito and Felipe Dana titled Adrift, won the World Press Photo Africa Regional Winner Open Format category and shows young fishermen walk into the ocean to board an artisanal fishing boat in Nouakchott, Mauritania, Friday, Dec. 10, 2021. In May 2021 a boat from Mauritania full of dead men was found off the coast of the Caribbean Island of Tobago. Who were these men and why were they on the other side of the Atlantic Ocean? Two visual journalists sought answers, uncovering a story about migrants from West Africa who seek opportunity in Europe via an increasingly popular but treacherous Atlantic route. (AP Photo/Felipe Dana)
This image provided by World Press Photo is part of a multimedia project by Associated Press' Renata Brito and Felipe Dana titled Adrift, won the World Press Photo Africa Regional Winner Open Format category and shows Moussa Sako, an asylum-seeker from Mali, who survived 22 days aboard a Mauritanian boat drifting in the Atlantic Ocean covers his face during an interview with the Associated Press in Guadalajara, Spain, Sunday, Nov. 14, 2021. In May 2021 a boat from Mauritania full of dead men was found off the coast of the Caribbean Island of Tobago. Who were these men and why were they on the other side of the Atlantic Ocean? Two visual journalists sought answers, uncovering a story about migrants from West Africa who seek opportunity in Europe via an increasingly popular but treacherous Atlantic route. (AP Photo/Felipe Dana)
This image provided by World Press Photo and taken by Julia Kochetova is part of a series titled War is Personal which won the World Press Photo Open Format Award. Amidst tens of thousands of civilian and military casualties and an effective stalemate that has lasted for months, there are no signs of peace on the horizon for Russia's war in Ukraine. While news media updates its audience with statistics and maps, and international attention drifts elsewhere, the photographer has created a personal website that brings together photojournalism with the personal documentary style of a diary to show the world what it is like to live with war as an everyday reality. (Julia Kochetova/World Press Photo via AP)
This image provided by World Press Photo and taken by Julia Kochetova is part of a series titled War is Personal which won the World Press Photo Open Format Award and shows a stabilization point near Bakhmut, Ukraine, of the 5th assault brigade and 77th brigade. Hospitalliers battalion - volunteer battalion of combat medics are helping here. Amidst tens of thousands of civilian and military casualties and an effective stalemate that has lasted for months, there are no signs of peace on the horizon for Russia's war in Ukraine. While news media updates its audience with statistics and maps, and international attention drifts elsewhere, the photographer has created a personal website that brings together photojournalism with the personal documentary style of a diary to show the world what it is like to live with war as an everyday reality. (Julia Kochetova/Der Spiegel/World Press Photo via AP)
This image provided by World Press Photo and taken by Julia Kochetova is part of a series titled War is Personal which won the World Press Photo Open Format Award and shows the training of mobilized conscripts of 68th brigade in Donetsk region, not far from frontline. 68th brigade recently liberated Blagodatne village during the Ukrainian counter-offensive. The instructors came from US, working for NGO "Saber".Amidst tens of thousands of civilian and military casualties and an effective stalemate that has lasted for months, there are no signs of peace on the horizon for Russia's war in Ukraine. While news media updates its audience with statistics and maps, and international attention drifts elsewhere, the photographer has created a personal website that brings together photojournalism with the personal documentary style of a diary to show the world what it is like to live with war as an everyday reality. (Julia Kochetova/Der Spiegel/World Press Photo via AP)
This image provided by World Press Photo and taken by Alejandro Cegarra for The New Times/Bloomberg is part of a series titled The Two Walls which won the World Press Photo Long-Term Project Award and shows Carlos Mendoza, a Venezuelan migrant, crossing the Rio Grande river to seek asylum in the United States. Piedras Negras, Mexico, 7 October 2023. (Alejandro Cegarra/The New York Times/Bloomberg/World Press Photo via AP)
This image provided by World Press Photo and taken by Alejandro Cegarra for The New Times/Bloomberg is part of a series titled The Two Walls which won the World Press Photo Long-Term Project Award and shows a migrant walking atop a freight train known as "The Beast." Migrants and asylum seekers lacking the financial resources to pay a smuggler often resort to using cargo trains to reach the United States border. This mode of transportation is very dangerous; over the years, hundreds have fallen onto the tracks and have been killed or maimed. Piedras Negras, Mexico, 8 October 2023. (Alejandro Cegarra/The New York Times/Bloomberg/World Press Photo via AP)
This image provided by World Press Photo and taken by Lee-Ann Olwage for GEO is part of a series titled Valim-babena which won the World Press Photo Story of the Year Award and shows Dada Paul Rakotazandriny (91), who is living with dementia, and his granddaughter, Odliatemix Rafaraniriana (5), get ready for church on Sunday morning at his home in Antananarivo, Madagascar. 12 March 2023. (Lee-Ann Olwage/Geo/World Press Photo via AP)
This image provided by World Press Photo and taken by Lee-Ann Olwage for GEO is part of a series titled Valim-babena which won the World Press Photo Story of the Year Award and shows Joeline (Fara) Rafaraniriana (41) watches her father, Dada Paul Rakotazandriny (91) clean fish at home on Sunday afternoon. A typical Sunday consists of the family attending church in the morning and spending time together in the afternoon. Fara works during the week and as the sole provider and carer for her daughter and father struggles to manage all her responsibilities in the absence of assistance by her siblings who live close by. Mandrosoa Ivato, Antananarivo, Madagascar. 12 March 2023. (Lee-Ann Olwage/Geo/World Press Photo via AP)
This image provided by World Press Photo and taken by Mohammed Salem of the Reuters news agency won the World Press Photo Award of the Year and shows Palestinian woman Inas Abu Maamar, 36, embracing the body of her 5-year-old niece Saly, who was killed in an Israeli strike, at Nasser hospital in Khan Younis in the southern Gaza Strip, October 17, 2023. (Mohammed Salem/Reuters/World Press Photo via AP)
