Despite reporting an increased level of retirement confidence, participants continue to feel insecure about the state of Social Security and Medicare in the U.S, finds the latest Retirement Confidence Survey (RCS) by the Employee Benefit Research Institute (EBRI), out today.
The survey shows that 67% of workers and 78% of retirees believe they’ll have enough money to last throughout retirement, an uptick for retirees from 74% in 2024.
Yet, while they remain assured in their savings, participants and retirees reported fears over the future of Social Security and Medicare, and specifically, whether the two agencies will eventually run out of benefits. Seventy-nine percent of workers and 71% of retirees in EBRI’s RCS report say they are at least somewhat concerned over the state of both agencies.
The concerns are especially alarming, as participants continue to factor Social Security benefits as a prominent piece to their overall retirement savings strategy. According to a fact sheet by the Social Security Administration (SSA), over seven million Americans ages 65 and older receive at least 90% of their income from Social Security. In EBRI’s analysis, 87% of workers expect Social Security benefits to be a primary source of income in retirement. Retirees confirm this belief, as 94% report Social Security as a source of retirement income.
Further, 60% of workers and 80% of retirees who reported concerns worry that changes could reduce their Social Security benefit, and eight out of 10 concerned retirees are nervous about a drop in their Medicare benefits.
“Workers and retirees generally appear to be remaining confident about their retirement prospects. However, they are concerned that federal government programs for retirees such as Social Security and Medicare will be cut,” said Craig Copeland, director of Wealth Benefits Research at EBRI. “The concern about Social Security is especially prominent, as almost all retirees say that Social Security is a source of retirement income, and nearly as many workers expect Social Security to be an income source when they retire.
Inflation, healthcare, remain top of mind
Workers in EBRI’s RCS analysis also named concerns over the impact of market volatility on their retirement portfolios and rising healthcare costs. According to RSC, seven in 10 workers are worried about making significant cuts to spending due to current inflation, stock market volatility, and rising housing costs.
“Workers are concerned about inflation negatively impacting their ability to spend as well as the volatility of the stock market,” he said. “Not only are workers concerned about having to cut their spending, but they are also concerned that the higher costs will reduce their ability to save as much as they want.”
More than half of workers also agreed that the impact of increasing healthcare costs is hindering their ability to save for retirement, and two in five retirees admit that healthcare expenses in retirement are more expensive than initially expected.
To offset these concerns, more employees are considering working in retirement or are planning to retire later. Two in 10 workers adjusted their target retirement age for workers in 2024, with most planning to retire later, EBRI reports. However, retirees surveyed said they left the workforce at a younger age than most workers anticipate—three in five retired earlier than 65, with a median retirement age of 62.
Lifetime income, guidance are top benefits
Given their concerns, workers are looking to guaranteed income options to further assist them in retirement, EBRI finds. According to the findings, among workers who are offered a workplace retirement savings plan, around three in 10 list investment options that provide guaranteed lifetime income as one of the most valuable improvement to their plan. Around 7 in 10 Americans found a workplace plan default investment option that includes an allocation to guaranteed lifetime income appealing, and close to three-quarters of workers were interested in this feature.
While they search for guidance from a financial advisor for help with retirement planning, less than half of respondents reported working with a professional. Four in five retirees and three-quarter of workers say they have the right educational and support resources to help with major financial events, but two in five workers and one in five retirees are unsure on how to obtain financial advice.
Still, at least seven in 10 Americans concur that financial services companies understand how to help them with retirement and financial planning, showing that respondents still trust these institutions.
The 2025 RCS surveyed a total of 2,767 Americans ages 25 or older and was conducted between Jan. 2 to Feb. 3, 2025. The survey included a general population sample of 2,047 Americans, consisting of 1,042 workers and 1,005 retirees, plus an oversample of 720 non-Hispanic Black or African American respondents.
SEE ALSO:
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.