Workers Worry About the Future of Social Security
This is especially a concern, as only 20% believe they are saving adequately for retirement.
Seventy-six percent of workers last year expressed concerns that Social Security may not be in existence when they retire, the Transamerica Center for Retirement Studies found in a survey, released as “A Compendium of Findings About American Workers.”
“Most workers are counting on Social Security as a meaningful source of income in retirement, and most are concerned about its future,” says Catherine Collinson, CEO and president of the Center and the Transamerica Institute. “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.”
The survey also found that only 20% strongly agree that they are building a large enough retirement nest egg. While low, this is an improvement from the 11% who said so in the 2013 survey. Forty-four percent of workers say they have financially recovered (24%) or were not impacted (20%) by the Great Recession—a large improvement from the 29% who said the same in 2014.
Only 18% of workers are very confident they will retire will a comfortable lifestyle. Again, this is a low figure, but an improvement from 10% in 2013. Seventy-one percent of workers are offered a defined contribution (DC) plan, up from 68% in 2013. Among those who are offered a DC plan, 81% participate, up from 28% in 2013. They contribute an average of 10% of their salary, up from 7% four years prior.
American workers report that their total household retirement savings amounts to $71,000 (estimated median), up from $53,000 in 2013. Baby Boomers have a median savings of $164,000, up from $103,000 in 2013. Fifty-six percent of workers plan to continue working in retirement, either full-time (14%) or part-time (42%). This is up only slightly from the 54% who planned on continued work in retirement in 2013.
The survey also found that 82% of companies with 500 or more employees have a DC plan, while 59% of companies with five to 499 employees can say the same. Only 55% of Gen Xers are somewhat or very confident they will be able to fully retire with a comfortable lifestyle, compared to 67% of Millennials and 62% of Boomers.
Men report having total household retirement savings of $123,000, compared to $42,000 among women. Thirty-eight percent of men say they have saved $250,000 or more, compared to only 20% of women. Thirty-nine percent of workers making less than $50,000 a year say that Social Security will be their primary source of income. By comparison, 38% of those making between $50,000 and $99,000 and 49% of those making $100,000 or more say their DC savings will be their primary source of income in retirement.
The Harris Poll conducted the online survey of 6,372 workers for the Transamerica Center for Retirement Studies between last August and October.