As we’re all too aware by now, it’s been a raw decade for young Americans. The job market still has a giant, recession-shaped crater in it. A college degree is more expensive yet more essential than ever. Wages are stagnant.
All of this adds up to a single sad possibility, according to the New York Times’ Annie Lowrey: Today’s twenty- and thirty-somethings may never end up as rich and financially secure as their parents. Lowrey’s story points to a recent study by the Urban institute, which suggests that Americans under forty, financially wracked by student debt and the housing bust, have saved up much less wealth than the generations before them. Because wealth compounds over time, there’s a strong chance they won’t ever catch up.
“For the early generations, it was an incredibly good deal,” said Andrew Biggs, a former deputy Social Security commissioner who is now a scholar at the American Enterprise Institute. “The government gave you free money and getting free money is popular.”
If you retired in 1960, you could expect to get back seven times more in benefits than you paid in Social Security taxes, and more if you were a low-income worker, as long you made it to age 78 for men and 81 for women.
As recently as 1985, workers at every income level could retire and expect to get more in benefits than they paid in Social Security taxes, though they didn’t do quite as well as their parents and grandparents.