Should Younger Federal Employees Plan for Retirement Without Social Security?
Should Younger Federal Employees Plan for Retirement Without Social Security?
By Francis Xavier (FX) Bergmeister
Record numbers of Americans are claiming Social Security benefits earlier than expected. At the same time, many younger workers are beginning to wonder whether Social Security will still exist when they retire.
Those two trends may seem unrelated, but they’re connected by a common theme: uncertainty.
According to recent industry research, Social Security retirement applications increased dramatically during the first part of 2025 as many older Americans rushed to claim benefits amid concerns about the program’s future and the Social Security Administration’s ability to provide timely service.
Meanwhile, financial advisors report that many younger investors are taking the opposite approach. Instead of planning around Social Security, they are building retirement plans that assume they may receive little—or even none—of their future benefits.
For federal employees, both reactions deserve a closer look.
Why Claims Are Increasing
Several factors have contributed to the increase in Social Security applications.
The Social Security Administration has experienced staffing reductions, increased call wait times, changes to identity verification procedures, and heavy media coverage surrounding the program’s long-term finances. Those developments have caused anxiety among many individuals approaching retirement.
There are also demographic reasons for the increase.
Every day, thousands of Baby Boomers continue reaching retirement age, naturally increasing the number of benefit applications.
In addition, recent legislation restoring benefits for many public-sector retirees has also contributed to higher application volume.
Should Younger Workers Assume Social Security Will Disappear?
Probably not.
Although the Social Security Trust Funds face long-term financing challenges, the program is not expected to disappear.
Current projections indicate that if Congress takes no action before the trust funds are depleted, ongoing payroll taxes would still finance roughly 80% of scheduled benefits. That means benefit reductions—not elimination—represent the more likely outcome if reforms are delayed.
Most retirement professionals therefore recommend avoiding two extremes.
The first mistake is assuming Social Security will fully fund your retirement. The second is assuming it will not exist at all. The most prudent planning strategy generally falls somewhere in between.
What Financial Advisors Are Telling Younger Clients
Many financial planners now prepare two retirement projections for younger workers.
The first assumes Social Security benefits remain largely intact. The second assumes reduced benefits or later eligibility ages.
This approach allows clients to see how much flexibility they have if Congress eventually changes the program. Some advisors expect future reforms could include:
- A higher Full Retirement Age.
- A later earliest claiming age.
- Higher payroll taxes.
- Changes to benefit formulas.
- Higher income taxes on benefits for some retirees.
While no one knows which reforms Congress may ultimately adopt, relatively few experts believe Social Security will simply disappear.
What This Means for Federal Employees
Federal employees occupy a somewhat unique position.
Unlike many private-sector workers, most career federal employees receive retirement income from several different sources:
- A FERS pension.
- The Thrift Savings Plan (TSP).
- Social Security.
- Personal savings and investments.
That diversified retirement structure provides an important advantage. Even if future Social Security benefits are somewhat reduced, many federal retirees will still have guaranteed lifetime income from both their FERS annuity and Social Security, supplemented by TSP savings.
However, younger employees should resist the temptation to reduce TSP contributions because they believe Social Security will “take care of retirement.”
Likewise, they should avoid becoming so pessimistic that they unnecessarily sacrifice today’s quality of life in an effort to replace every projected Social Security dollar.
Focus on What You Can Control
No one can predict exactly what Congress will do over the next 20 or 30 years. What federal employees can control includes:
- Contributing enough to receive the full government TSP match.
- Increasing TSP savings whenever possible.
- Diversifying investments appropriately.
- Building emergency savings.
- Managing debt.
- Understanding how Social Security fits into an overall retirement income strategy.
These are decisions that will improve retirement security regardless of what changes eventually occur.
The recent surge in Social Security claims reflects growing uncertainty among Americans approaching retirement. At the same time, many younger workers are becoming increasingly skeptical that Social Security will provide meaningful retirement income decades from now.
Both concerns are understandable. But history suggests that Social Security is far more likely to be modified than eliminated.
For federal employees, the wisest course is neither to ignore Social Security nor depend on it entirely.
Instead, build a retirement plan that remains successful under multiple scenarios. If future Social Security benefits remain close to today’s levels, your retirement will be stronger. If Congress eventually reduces benefits or raises retirement ages, you’ll already be prepared.
In retirement planning, flexibility has always been one of the most valuable assets—and that is unlikely to change.