With higher than predicted labor force participation rates, Social Security may have a shot at surviving longer.
Social Security might have a shot at surviving for another generation — and that’s thanks to 78.1 million individuals who will be contributing to it.
These 78.1 million individuals who come after millennials and were born after 1997 make up what is known as Generation Z.
Morgan Stanley says it is more optimistic about the impact of Generation Z than the Congressional Budget Office.
The Wall Street firm’s more bullish assessment on labor-force participation in particular means that its view of potential GDP by 2040 is above the CBO’s by 2.4% to 4.3%. Morgan Stanley says the CBO is understating potential labor force growth by between 0.2% to 0.3% per year in the 15 years through 2040.
While this may seem like a small variance, given that the continued funding of Social Security depends upon the number of people working, the variance has tremendous implications.
Currently, there are approximately 58 million beneficiaries receiving monthly Social Security payments averaging $1,249.55 . As of now, Social Security is funded through 2034, according to the Social Security Administration.
According to the Morgan Stanley report, the increase in the expected number of workers may allow Social Security to remain alive well beyond 2034.
– Market Watch