Millennials & Your Social Security

"10,000 Baby Boomers Retire Each Day!  You can easily find headlines like this.   The Washington Post found out when they looked into the analysis behind those numbers, that the numbers are basically true.   From there it's pretty easy to extrapolate something like 76 million Baby Boomers collecting social security for 30 years and figure out that the program and other programs like medicare will run out of money. 

I say to that bunk.  Probably 95% of the sites on the web and the same amount of TV or radio adds you see or hear that points out a picture of looming bankruptcy for these programs has an agenda, usually to sell you something.  Before blindly taking these numbers as faith stop to consider the facts behind the headlines.  

First it is true that these programs have some short term demographic problems owing to the size of the "Boomer" cohort that is beginning to receive benefits.  However, these problems are more short term in nature and can likely be fixed {raise taxes, borrow, means test benefits, etc}.  The reason is the "Millennial Generation"- kids that in 2015 are between 18 and 35 years of age.  These cohort is beginning to enter the workplace.  I know because I have three  children of this generation.  One's already working and the other is about to go teach special education.   There's also over 75 million of these "Millennials" which currently makes them larger than the Baby Boomers-who up till now were the largest demographic cohort in the country.

Studies performed by the Pew Research Center and others show that the "Millennial Generation" is on the verge of becoming a major demographic force.  They're a cohort that folks ignore at their peril.  Perhaps I'm more in tune with this group owing to the nature of my own kids, but they're going to have an impact on the economy in the coming years and by their force will impact investing.  They are becoming a major theme of ours and one you can expect to hear more about in the coming months.  

Now back to their impact on social programs for senior citizens.  The majority of Millennials are just now entering their family building stages.  Assuming they simply reproduce themselves there will be between 75-150 million of them 20 to 30 years down the pike.  You have to add into that mix the 55 million "Gen. Xers" that are ahead of them and whatever percentage of the 61 million group dubbed by Pew as the Post-Millennial generation thats already in nursery school and there's probably enough there to finance the "Boomers" retirement needs.  Also factor in that a certain amount of Seniors also leave this "mortal coil" each day and stop receiving benefits.  

Remember that the next time somebody tells you that you're not going to receive your social security. 

Next major post will be either next Tuesday or Wednesday although we may break in if events warrant or we see something of interest before then.

Source:  Pew Research Center:  "This Year, Millennials Will Overtake Baby Boomers."