Generation Y has received a myriad of attention lately. Many 20-somethings were trying to break into the workforce at the same the recession was pushing experienced workers out. The New York Times printed a large article criticizing the self-centered career and relationship choices 20-somethings make. And now much of Generation Y is wondering why they lose such a large chunk of their paychecks to a program that may not be around when it’s time to retire.
Many Baby Boomers who were planning on retiring lost so much money during the recession that they need to work longer in order to adequately supplement their Social Security checks. Generation Y faces a similar problem: many financial planners in Ohio tell 20-somethings to not even plan on receiving Social Security checks when they retire.
If that’s the case, do 20-somethings benefit at all from the 4.2 percent tax deduction taken from their paychecks? Thankfully, the answer is yes.
The Social Security Administration (SSA) recently hosted an online presentation to help young people understand how Social Security benefits them, even before retirement. One of the biggest benefits is disability insurance. Most people who have worked for at least two years may qualify for Social Security benefits if they become disabled or injured.
According to statistics, more than 30 percent of today’s 20-somethings will be disabled before they are 67 years old. Social Security disability benefits can help ensure those individuals still have the financial resources they need to manage their daily expenses.
Survivor’s insurance can also be crucial for young adults who have families. If you died unexpectedly, your spouse and children may qualify for monthly Social Security benefits. The Social Security Administration estimates that almost 15 percent of 20-somethings will die before they are 67 years old. Although that is a bleak projection, it should be at least partially rewarding to know your family could still be financially supported.
Read more in the next post to learn about two additional benefits, as well as SSA’s predictions for the future of Social Security.
Source: US News, “How Generation Y Benefits From Social Security,” Emily Brandon, 11 March 2011