Americans continue to display concerns over the future of Social Security.
In their annual Social Security survey, Nationwide Retirement Solutions finds that 72% of adults are concerned the system will exhaust its funding, and even 23% believe they won’t “see a dime” from Social Security.
This apprehension is particularly prevalent among Millennials, 79% who reported worries over the funding by the time they retire. Gen Xers also reported high levels of concern at 77%, compared to 66% of Gen Zers and 66% of Baby Boomers.
As a result, many are calling for reforms in the upcoming general election, with 69% noting that a candidate’s stance on the topic will impact who they end up voting for. Others are proposing key changes like raising the minimum eligibility age from 62 to 64 for future retirees aged 50 or under (66%) or increasing the full retirement age (FRA) from 67 to 69 for this group (51%).
“Though Americans’ heightened anxiety around the Social Security program is not surprising, it is now more important than ever for them to have a retirement plan that hedges against the possibility of receiving less in benefits than expected,” said Tina Ambrozy, senior vice president of Strategic Customer Solutions at Nationwide. “We are in an opportune time for financial professionals to empower their clients to plan for the future and build long-term financial resilience.”
The new report is one of many recent research developments highlighting the qualms consumers face with Social Security, and the reforms they’re demanding from policymakers. A survey from the National Institute on Retirement Security (NIRS) this month found that 87% of respondents believe Congress should prioritize funding Social Security benefits now instead of waiting until its predicted insolvency in 2033. Other reports this year from Transamerica and the Peter G. Peterson Foundation also saw respondents calling for improvements to the benefit.
Maximizing education and support
Education on the benefits is needed among consumers, as well. More than half of respondents to Nationwide’s survey (51%) say they are unaware on how to maximize their Social Security benefits, and 33% do not know at what age they become eligible to receive full retirement benefits.
The knowledge gap is also trending upwards, Nationwide notes. In 2015, the survey recorded 86% of respondents age 50 and over who knew that Social Security benefits could extend to spouses or children, compared to only 74% who know this information today. Similarly, in 2015, 66% of respondents over the age of 50 understood that divorced adults could still retain benefits based on their ex-spouse’s record, compared to 52% today.
Furthermore, 66% of respondents in this year’s survey did not know or were unsure that Social Security is protected against inflation, and just 4% could identify all five factors that define the maximum Social Security benefit, Nationwide added.
The lack of comprehension underscores the need for education, resources, and ultimately, support, the report finds. And while respondents to Nationwide’s survey say they don’t want to work with a financial advisor, 75% expressed interest in discussing savings or investment options to safeguard income in retirement.