Widespread Concerns Over U.S. Social Security Solvency

According to a recent survey conducted by Bankrate, a significant number of Americans, both retired and non-retired, are worried about the future of their Social Security benefits. The survey, which included 2,492 individuals, revealed that 73% of non-retired adults and 71% of retired adults express concern about the depletion of the Social Security retirement trust fund in 2033.

Older Americans who are not yet retired, particularly baby boomers and Generation Xers, are especially anxious. The survey found that 81% of working baby boomers and 82% of Gen Xers fear they may not receive their full benefits upon reaching retirement age if the trust fund is exhausted.

«Once someone’s actually staring at the prospect of the end of their full-time employment, the seriousness of the need to fund that part of their life comes into full view,» remarked Mark Hamrick, a senior economic analyst at Bankrate.

Concerns about Social Security’s future are not confined to the older generations, with millennials and Gen Zers also sharing in the apprehension, at rates of 69% and 62%, respectively. The program relies partly on trust funds to supplement benefit payments, with payroll taxes offering a consistent revenue stream.

Financial planners often advise clients on the optimal timing to begin claiming Social Security benefits, taking into consideration the looming trust fund depletion. «My bottom line on the whole thing is, you don’t know how long you’re going to live,» stated George Gagliardi, a certified financial planner and founder of Coromandel Wealth Strategies, suggesting that delaying benefits until age 70, when feasible, is advisable.

The Social Security Administration’s actuaries project that the trust fund will be depleted by 2033. In such a scenario, only a portion of the promised benefits would be payable. This prospect has spurred dialogue among financial advisors and their clients concerning potential strategies to mitigate this financial risk.

David Haas, owner of Cereus Financial Advisors, underscores the program’s role as «inflation indexed longevity insurance,» highlighting its unique value as it automatically adjusts for inflation. «You really can’t get that from anywhere else,» Haas said.

Many Americans, however, continue to face economic challenges such as inflation, health care costs, and housing affordability, which complicate their ability to save adequately for retirement. Consequently, a substantial portion of non-retired adults anticipate relying heavily on Social Security, with 28% expecting to be «very» reliant, according to the survey.

Bankrate’s findings also indicate that older non-retired individuals, specifically baby boomers and Gen Xers, expect a heavy reliance on Social Security, underscoring the critical role the program plays in their financial security during retirement.