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Field Work

Headlines Sway Perception of Social Security

Each new reminder in the annual Trustees’ Report that Social Security’s trust fund will be depleted sometime in the 2030s causes a new round of angst. Some 40 percent of the workers in one poll expect to receive nothing from Social Security when they retire.

The media often play into this sense of unease with sensational headlines like “Social Security and Medicare Funds Face Insolvency” (The New York Times) or “Trust Fund to Run Dry in 2035” (Fox Business).

While these headlines do their job of attracting readers’ attention, they don’t reflect the fact that the payroll taxes paid by employers and employees will keep rolling in. If policymakers take no steps to prevent the depletion, the tax revenues will still cover about three-fourths of future retirees’ benefits, according to the 2021 Trustee’s Report released in August.

But a new study by the Center for Retirement Research shows that headlines focused on the trust fund’s potential depletion can fuel misperceptions about Social Security’s viability. In reaction to news stories with alarming headlines, some workers in an online experiment said they would alter their retirement plans.

The experiment was conducted during the June lull in the pandemic when COVID was less of a distraction. Everyone in the experiment saw the same article – except for the headline and the first sentence, which essentially repeated the headline.

The workers who read articles with headlines emphasizing the trust fund’s depletion predicted they would start their benefits about a year earlier – presumably hoping to protect them somehow by locking them in early – than those who saw the staid headline – “Social Security Faces a Long-Term Financing Shortfall.”

Two headlines in the experiment sent a more blunt message: “Social Security Fund Headed Toward Insolvency in 2034, Trustees Find” and “The Social Security Trust Fund Will Deplete its Reserves in 2034.” The people who saw a final headline, which alluded to the trust fund’s depletion – “Revenues Projected to Cover Only 75 Percent of Scheduled Social Security Benefits after 2034” – said that they, too, were more likely to start their benefits earlier.

Headlines also influenced how much workers in the experiment expect to get from Social Security when they retire.

The workers who were exposed to headlines about future “insolvency” and “depleted reserves” predicted they would receive 40 percent to 60 percent of their scheduled benefits. In reaction to the headline that said payroll taxes cover three-fourths of the benefits, workers were closer to the mark. They expected to get 60 percent to 80 percent of their benefits.

While the tone of the headlines about Social Security matters, the fact remains that the program faces a long-term financing challenge. A separate report from the Center for Retirement Research pointed out that addressing the shortfall sooner rather than later could “maintain public confidence in this valuable program and … avoid precipitous cuts” when the trust fund depletes.

To read the study, authored by Laura Quinby and Gal Wettstein, see “Does Media Coverage of the Social Security Trust Fund Affect Claiming, Saving, and Benefit Expectations?”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.

3 Responses to Headlines Sway Perception of Social Security

  1. They can easily fix the darn thing for 50 years: 50% more from employees and 50% more from employers. Everyone knows that.

  2. Ray from Maryland says:

    I appreciate your interesting experiment and insightful article. It highlights a prevalent issue: news providers need to grab readers’ attention in an increasingly ‘noisy’ virtual landscape, which often leads to headlines being more dire and dramatic. This can lead to consumers of this information to be misinformed, even when that is not the intent of the news provider. In this particular case, few Americans are statisticians or financial experts so it is understandable that they may miss the nuanced reality of the “trust fund running dry.” It is an unfortunate reality that headlines will continue to lean toward the dramatic, so keep these informative articles coming! Your article is nicely supported by your experiment.

  3. Larry Littlefield says:

    “The workers who were exposed to headlines about future “insolvency” and “depleted reserves” predicted they would receive 40 percent to 60 percent of their scheduled benefits. In reaction to the headline that said payroll taxes cover three-fourths of the benefits, workers were closer to the mark. They expected to get 60 percent to 80 percent of their benefits.”

    The 40 to 60 percent figure is right.

    First of all, the 80 percent figure assumes everyone will be treated equally. But the whole history of the past 40 years shows that the earlier born will take more and pay for less, with those following left to do without because they have “time to adjust.” So if you were born in 1957 or earlier, 100 percent. Those born later?

    Moreover, later born generations also have lower career earnings, and that alone will reduce their Social Security benefits even further.

    And they will have to pay higher taxes, to pay back Generation Greed’s debts.

    “They can easily fix the darn thing for 50 years: 50% more from employees and 50% more from employers. Everyone knows that.”

    Are those now retired willing to pony up the extra taxes they didn’t have to pay? Nope. Moreover, a huge share of the later-born workforce has been shuttled into contract labor status, and pays both halves of that tax.

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