It’s nothing new. Research shows more than three-quarters of workers fear Social Security won’t be around by the time they retire—a figure that’s held steady since 2014.
Indeed, the Social Security Board of Trustees released a statement last month warning that if nothing changes, full funding for the government-sponsored benefit program will begin to diminish by 2034.
Yet, despite the Board’s projection, and despite workers’ belief that it could happen, many employees are still counting on Social Security to fund part of their retirement.
In fact, when asked about expected sources of retirement income, the second most common response was Social Security (74 percent), according to the Transamerica Center for Retirement Studies (TCRS).
Only self-funded savings like 401ks and other retirement accounts were cited more frequently (82 percent).
“Most workers are counting on Social Security as a meaningful source of income in retirement—and most are concerned about its future,” Catherine Collinson, CEO and president of Transamerica Institute and TCRS, said in a statement. “Reform is needed to mitigate Social Security’s funding shortfalls, but policymakers have made little progress in identifying and implementing specific changes. Workers need clarity and direction so they can plan accordingly.”
Fortunately, individuals are starting to save more on their own.
“American workers have seen gains in their retirement accounts over the past five years. The question is whether these gains are adequate for funding their retirement,” said Collinson.
In A Compendium of Findings About American Workers, TCRS reported:
- More workers are confident about retirement, but such confidence remains low.Only 18 percent of workers are “very” confident that they will be able to retire comfortably, up from 10 percent in 2013. Another 20 percent “strongly” agree they are building a large enough retirement nest egg. While still an alarmingly low percentage, it’s an improvement from 11 percent who said the same in 2013.
- Retirement plan coverage has increased slightly.Seventy-one percent of workers are offered a 401k or similar plan by their employers, up from 68 percent in 2013.
- Retirement plan participation and contribution rates have increased.Among workers who are offered a 401k or similar plan, 81 percent participate (up slightly from 78 percent in 2013), and they contribute 10 percent (median) of their annual salary (up from 7 percent in 2013).
- Savings have increased, but not enough to last 20 or more years in retirement. Total household retirement savings have grown to $71,000 (estimated median) in 2017, up from $53,000 in 2013. Baby Boomer workers, the generation that is currently entering retirement, have saved $164,000 (estimated median) in all household retirement accounts, up from $103,000 in 2013.
- Many workers plan to keep working in retirement.The majority of workers (56 percent) plans to continue working in retirement, including 14 percent who plan to work full-time and 42 percent who plan to work part-time. These findings are relatively unchanged since 2013 (54 percent).