Nearly three in four Americans now voice skepticism about their ability to rely on Social Security benefits when planning for retirement.
In fact, according to a new survey study published by Allianz Life, a majority of Americans are worried about their long-term financial stability, and their concern about the stability of the Social Security program is a big reason why.
The survey results show nearly eight in 10 (78%) worry that they might not be able to afford the lifestyle they want in retirement due to the increased cost of living and a lack of guaranteed income. Many Americans also fear the damage that market volatility could wreak on their retirement nest eggs, according to Allianz Life.
On the positive side, fewer Americans are now worried about a "major recession" being right around the corner compared to last year, though 57% still voice this concern. At the same time, 41% say they are concerned they will be laid off because of an economic downturn later this year.
Ultimately, the data shows American workers are harboring serious concern about their long-term financial health, and they fear promised Social Security benefits are no longer a reliable backstop for achieving a dignified retirement lifestyle.
A Concerning Moment
Publication of the new survey data comes a little more than a week after the board of trustees tasked with overseeing the Social Security program issued a worrying 2023 status report.
The report suggests Americans' concerns about Social Security are well-founded, as the main trust fund used to support the payment of retirement benefits is now on track to go bust in 2033 — one year earlier than reported in 2022. Should Congress fail to act before that time, benefits would need to be cut by approximately 25%.
Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits, according to the trustees. Unfortunately, many expert observers anticipate that congressional action will remain elusive in the years ahead, setting the stage for a genuine Social Security funding crisis in the early 2030s.
As noted by Kelly LaVigne, vice president of consumer insights at Allianz Life, Social Security benefits are often the backbone of a retirement strategy, but Americans must understand that Social Security cannot be the entire strategy.
"A strong retirement strategy will ensure you have enough guaranteed income to cover your essential expenses," LaVigne says. "That guaranteed income can come from Social Security benefits along with other investments and protection products, such as annuities."
