With concerns over possible Social Security depletion growing among Americans, a new survey finds that 75% of adults over age 50 worry about the government program’s insolvency.
The 2023 Social Security survey from Nationwide Retirement Institute finds the number represents a 9% increase from 2014, when 66% of respondents reported similar fears. Additionally, 21% of adults aged 50 and above say they have no retirement savings outside of Social Security, up from 13% in 2014, and nearly a fifth plan to delay or have already delayed their retirement.
The lack of savings could be attributed to a continuous decline in pension funds, as only 31% of respondents today own a pension plan, down from 48% of Americans in 2014, found Nationwide.
Confidence levels raise while knowledge dips
Despite reporting their anxieties over Social Security, Nationwide found that confidence levels came in higher, or about the same, compared to 2014. Twenty-eight percent of respondents still believe that Social Security on its own would be enough to help them live comfortably in retirement, compared to just 17% who reported the same nine years ago. And, 40% of respondents in this year’s survey believe they are confident in Social Security knowledge, relative to 35% in 2014.
Yet, Americans across all generations lacked specific knowledge concerning Social Security, and more so in 2023 than in 2014. While 49% say they know how to maximize their Social Security benefits, only 8% correctly identified all the listed factors that determine the maximum benefits individuals may receive.
Furthermore, Nationwide reports that only 13% of adults correctly guessed their full retirement age (FRA) based on when they were born. On average, Americans guessed 60 years of age while Gen Z and millennials guess 54 and 55, respectively. The correct age is either 66 or 67, depending on the year a person is born.
Almost half (49%) of respondents were found to either not know or mistakenly believe that if they file for Social Security early then their benefits will automatically go up once they reach their FRA.
According to Nationwide, other key knowledge gaps include:
- About half (51%) of adults do not know or are not sure what percentage of their income is or will be replaced in retirement by Social Security.
- More than two in five (42%) of those not currently receiving Social Security are not sure how much their monthly Social Security payments will be once they claim benefits.
- More than two-thirds of consumers (70%) do not know that Social Security is protected against inflation.
Tina Ambrozy, senior vice president of Strategic Customer Solutions at Nationwide, notes that while Americans call for Social Security reforms, Nationwide’s research suggests a need for increased education on the government program.
“Nearly four out of five Americans say that the Social Security system needs to change, while at the same time our research shows that most people don’t understand how the current system works,” Ambrozy said in a release. “…Social Security is a complex system, and it can be difficult to know what you are entitled to. The past ten years of research have been about providing insights to aid that effort, and while we have made notable progress, we still have work to do.”
Seventy-nine percent of respondents in Nationwide’s survey believe the Social Security system needs to change, and almost half (46%) believe the government will “do the right thing” to ensure they have financial security in retirement.
Millennials and Gen Xers were more likely call for reforms than Baby Boomers (81% and 86% vs. 73%, respectively), and trust the federal government to guarantee their financial security in retirement (at 54% and 56% vs. 39%, respectively).
When asked how Social Security would need to change, 49% called for an increase on taxes for higher earners, 41% suggested increased funding through taxes paid by employers, 40% say less taxation of Social Security benefits, 24% believe the Social Security Administration (SSA) should reduce the age of eligibility, 23% call for more taxes paid by workers, 19% want an increase in the FRA, 9% say benefits should be reduced gradually, and 6% say the Social Security system does not need to change.
Additional insights on Nationwide’s survey can be found here.
SEE ALSO:
- Chris Christie: Politicians ‘Liars and Cowards’ for Not Addressing Social Security Crisis
- Americans in High-Cost Cities Could See Smaller Social Security Benefits
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
