A study released Wednesday, August 11, by the Insured Retirement Institute (IRI) showed that boomers more than five years away from retirement were focused primarily on the need to live within a fixed income. The Consumer Financial Decisions (CFD) group of Strategic Business Insights (SBI) used Macro Monitor data gathered in the spring and summer of 2008, before the economy’s near collapse that fall, but, nonetheless, during a recession and time of great concern over the future.
Households self-designated as “unretired boomers” have a pessimistic outlook on their overall retirement preparedness; 60% are afraid they will outlive whatever money they have set aside and 70% afraid they are not saving enough for the future. IRI further says that nearly half of these unretired boomers “stated that they would put most of their assets in an investment that provides guaranteed income for life, even if it pays a low return.”
Cathy Weatherford, IRI president and CEO, said in a statement, “Despite its perilous state, our survey found that more than half of all unretired boomers plan to rely on Social Security for their retirement income. This is a clear indication that financial professionals, elected officials and the media all need to better educate consumers to look outside of Social Security to meet their guaranteed retirement income needs.”
The need to supplement Social Security benefits is great, particularly as worries about the stability of the 75-year-old program have once again embroiled it in disputes. There have again been calls for the program’s privatization, reduction of its benefits, raising the retirement age, and perhaps even elimination of the program altogether (Republican) or raising the income cap on taxation from its current level at $106,800 to shore up the fund (bipartisan).
Doing anything that would compromise Social Security or its existence, however, would be extremely unpopular with the American public, which still sees Social Security as an essential safety net. An AARP poll, also released in August to coincide with Social Security’s 75th anniversary, showed that 85% of adults opposed cutting the program to reduce the deficit and 57% of adults under 50 were willing to pay higher payroll taxes to ensure that Social Security would be there to help them. And another report by the Center on Budget and Policy Priorities, also released on August 11, showed that the program kept 20 million people above the poverty level.