Social Security’s Branding Problem

Social Security has a branding problem. In a time of digital image management, the 86-year-old bird needs a total makeover. Here are its top 3 problems:

People Think It’s Dying

People think it’s dying. Not a great look if you’re trying to attract followers and fans. I get it. When I was 25 and newly in the work force, I decided saving for retirement was all up to me. Social Security surely wasn’t going to be around by the time I hung up the cleats. Surprise! 30 years later, it’s still here and funding 65 million retirees.

What about the headlines that say it’s destined to run out of money? OK those headlines have been coming out ever since I was 25. Technically they are true. What they say in the fine print, not the headlines, is that the money is there. It just takes Congress to approve it every so often. For some befuddling reason, Congress tends to wait until the last actuarial moment to vote on it. And after they do, then the headlines calculate the new “running out of money” date and start over again. Not helpful to the brand image.

So, let’s ask, given that seniors vote at a higher rate than any other age demographic, which politician is going to not vote for funding Social Security? Even if Congress decided to defund Social Security, how likely is it they would stop it all of a sudden? It seems more likely and politically practical that it would be given a slow glide path to oblivion, phased in over a couple of decades, at least. Politically, Social Security probably has a lot of life left in it. But that headline doesn’t attract quite so many eyeballs.

The “Security” Part is Underrated

The “Security” part of Social Security is underrated, like your sister-in-law who cleans up the kitchen every time you make the pancakes. Social Security is not supposed to be the be-all end-all retirement plan. It’s supposed to keep you from abject starvation-level hunger and poverty like we sadly saw with seniors in the Depression. Although it’s not perfect, it’s done a pretty good job of that.

Not so sure? Stay with me for a sec. Take a look at your Social Security statement at socialsecurity.gov. (If you haven’t opened your Social Security online account yet, do so before an identity thief does it for you and causes big headaches.)

Let’s say your monthly payment at your Full Retirement Age is $2000. (The average by the way in 2021 is $1544. If you’ve paid in at the max for most of your career, your number is probably closer to $3500.) That’s $24,000 per year. To start, multiply that figure by your life expectancy. Say, 30 years. (Don’t think you’ll live until your mid-90s? Try this life expectancy calculator developed by a doctor at www.livingto100.com) $24,000 x 30 = $720,000.

Now increase that $24,000 by some kind of assumed COLA adjustment, say, 2%. Your $720,000 becomes $973,634.

By the time you retire, if you earned a little better than the average, you will have in essence saved up an additional $973,634 that Uncle Sam is guaranteeing for you. Maybe you could have done that on your own, maybe not. It’s probably safe to say most seniors would not have been lucky enough, diligent enough, or both, to have added nearly another $1 million to their pre-retirement net worth.

Nevertheless, there are soon-to-be retirees walking around with this six- or seven-figure asset accumulated over their working lifetimes and many of them don’t know it. Social Security hasn’t done so great at communicating its value, both as a legit guaranteed source of inflation-protected income, and as a poverty safety net.

It’s stuck in 20th century technology

Social Security is stuck in 20th century technology. Meaning, human to human interface. As the pandemic has shown, with Social Security offices closed or partially shut down, customer service has practically ground to a halt. It would seem that if some of the world’s biggest corporations could keep the lights on and customers satisfied with personnel working remotely, a large federal agency could maybe consult with them on how to do the same.

No wonder it gets a bad rap.

Any marketing gurus out there want to give Social Security a brand-helping hand? Imagine millions of people feeling a little more secure about not living in old-age poverty. For many, understanding the “Security” in Social Security would be a welcome relief.

Holly Donaldson

Holly Donaldson, CFP® runs an hourly and fee-for-service financial planning practice virtually from her Tampa Bay, Florida office. She also works with clients throughout the U.S. (except Texas) interested in retirement and tax planning advice without product sales or investment management. Holly is the author of The Mindful Money Mentality: How to Find Balance in Your Financial Future (Porchview Publishing, 2013) and publisher of the award-winning monthly e-letter, "The View From the Porch."

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