economy

January 14, 2026

401(k)s are making record millionaires while Social Security sinks

Republicans and Democrats don’t concur on many things these days, but on one point they increasingly agree: Social Security is a mess. The latest evidence comes from a viral Washington Post story reporting that the government’s retirement program “ends the year in turmoil.”

401(k)s are making record millionaires while Social Security sinks

TL;DR

  • Social Security faces turmoil with a multimillion-case backlog, record transaction volumes, and long customer service wait times.
  • The program is projected to be insolvent by 2033, with an estimated $25 trillion shortfall over the next 75 years.
  • Policymakers have acknowledged Social Security's financial unsustainability for decades but have failed to enact significant reforms since 1983.
  • Attempts at reform under Presidents Clinton and George W. Bush were unsuccessful due to political challenges and partisanship.
  • 401(k) accounts, individually owned and privately managed, are thriving and producing a new generation of modest millionaires.
  • Firms report increasing numbers of customers with 401(k) balances exceeding $1 million.
  • A Tax Foundation analysis suggests a worker contributing payroll tax equivalent to a 401(k)-style account could accumulate significantly more retirement income than expected from Social Security.
  • The article posits that 401(k)s are a better retirement vehicle due to individual ownership and market-based returns, contrasting with Social Security's reliance on political promises and a shrinking workforce.

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