The only certainty about Social Security is that its future is uncertain.
"I expect that Social Security will still be there for today's young generations when it comes time for them to retire," says Ronald Lee, professor of demography and economics at the University of California at Berkeley. "But they will have to work longer, and they may also have mandatory private savings accounts as well as employer-provided defined contribution pensions." The retirement age might move up to 67 or even 70, experts say.
"Even under current law, people are going to get benefits that are a smaller percentage of their pre-retirement earnings," says Alicia Munnell, of Boston College's Center for Retirement Research. "If they postpone when they claim their benefits, they're going to get them for [fewer] years." If they retire at 65, she adds, they will get a smaller payment.
The solution is for Millennials to take advantage of their youth, says Ritter. Time is on their side with saving and investing, so he counsels young people to set aside 15 percent of their paycheck and invest it for retirement, taking advantage of today's lower share prices. "With the market where it is compared to the higher level it used to be, with the dollar amount you're saving, you're buying more shares because they're at a lower price," he says.
