As Social Security celebrates its 90th anniversary, a new report spotlights the invaluable role the program plays. Almost 7 in 10 Americans (69%) are expecting Social Security as a source of retirement income, and 32% expect it will be their primary source of retirement income, according to Social Security Turns 90: The Cornerstone of Retirement Income, a report released by nonprofit Transamerica Center for Retirement Studies.
The report examines people's beliefs, expectations, and reliance on Social Security. It also sheds light on their views on how to address its funding shortfalls, as Social Security benefits will be depleted in 2033, according to SSA’s latest trustees report and as the Department of Government Efficiency continues cuts to the Social Security Administration.
"Social Security has served as the cornerstone of retirement income since its establishment nine decades ago. It provides millions of older Americans with guaranteed income, so that they can retire with greater financial security," said Catherine Collinson, CEO and president of Transamerica Institute and TCRS.
"With the estimated depletion of the Social Security trust funds looming large, now is the time for policymakers to identify reforms that can help ensure the program's sustainability for the next 90 years," Collison addded.
However, "Americans are anxious about the future of Social Security and what might happen to their benefits," she said. Among those who are not yet retired, 7 in 10 people (71%) are concerned that Social Security will not be there for them when they are ready to retire.
"Americans are counting on Social Security for retirement income to complement their employer-sponsored retirement benefits and personal savings," said Collinson.
More than half of retirees (53%) indicate Social Security will be their primary source of income throughout their retirement. Among those who are not yet retired, 1 in 4 people (25%) expect their primary source of retirement income to be Social Security.
The survey findings further illustrate the importance of Social Security for people's retirement security:
- 7 in 10 people who are not yet retired (70%) agree with the statement, "I feel that I could work until retirement and still not save enough to meet my needs," and 42% of retirees indicate that they were unable to save enough to meet their retirement needs.
- People who are not yet retired have saved $51,000 in total household retirement accounts, including people in the workforce ($65,000), homemakers ($16,000), and the unemployed who are not looking for work ($0) (estimated medians).
- Retirees have $126,000 in total household savings excluding home equity (estimated median).
"Social Security is a meaningful source of retirement income for Americans across the wealth spectrum, and it is a lifeline for retirees with limited means," said Collinson.
Reliance on Social Security varies dramatically by household income. More than half of people with an income of less than $50,000 (52%) expect Social Security to be their primary source of retirement income compared with 34% of those with an income of $50,000 to $99,000, 21% of income of $100,000 to $199,000, and 13% of income $200,000.
Social Security reliance is especially prevalent among retirees with an income of less than $100,000. More than 8 in 10 retirees with an income of less than $50k (85%) and more than half of retirees with an income $50,000 to $99,000 (54%) cite Social Security as their primary source of retirement income.
"Women face societal headwinds that make it even more challenging to achieve a financially secure retirement. The persistence of the gender pay gap combined with taking time out of the workforce for parenting and caregiving puts many women at risk of inadequately saving for retirement. As a result, women have greater reliance than men on Social Security for retirement income," said Collinson.
Women are more likely than men to cite Social Security as their expected primary source of retirement income (36%, 27%, respectively), according to the survey. Reliance on Social Security is even greater among retired women. Almost 6 in 10 women retirees (59%) cite Social Security as their primary source of income, compared with 47% of men retirees.
Amid widespread concerns about Social Security, the survey asked people how Congress should address its projected funding shortfall. People's responses for specific reforms include increasing the maximum earnings subject to payroll taxes (38%), increasing the Social Security payroll tax rate (35%), preserving retirement benefit payments for retirees in greatest need (28%), and raising the retirement age (22%).
"Social Security is the cornerstone of retirement income. Americans are paying into Social Security with the expectations of receiving the benefits they have been promised," said Collinson.
"By implementing reforms to address the program's funding shortfall, policymakers can ensure its sustainability for future generations. The sooner policymakers act, the more time people will have to react and adjust their retirement plans accordingly,” she added.
“Hardworking Americans shouldn’t have to worry about receiving the retirement benefits they’ve earned…,” said Secretary of Labor Lori Chavez-DeRemer. “As President Trump continues reining in wasteful spending, citizens who’ve paid into Social Security will be able to enjoy the secure retirement they deserve. ”
However, Congress must take “prompt action” to strengthen the Social Security Trust Fund,” said the trustees in a letter to President Trump. “Lawmakers could choose to increase revenues to the trust fund, reduce cost through modification of the OASI program benefit levels or eligibility requirements, or use a combination of methods to strengthen the trust fund’s financial condition. The board recommends that lawmakers quickly enact legislation to make the necessary adjustments.”
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