Three in 10 Americans rely on Social Security benefits to see them through their retirement years, according to a new NerdWallet survey, despite changing pools of funds that could mean declines in their checks over the next decade. Harris Poll conducted a survey on behalf of the personal finance company of nearly 2,096 adults in the United States, between July 11 and 15, in which participants were asked how they were preparing for their retirement.
The results are worrying, 31 percent of Americans said they do not or will not have a retirement account from which they can withdraw money when they stop working. About the same percentage, 30 percent, said they believe Social Security benefits will provide them with enough income to live comfortably throughout their retirement. That includes 46 percent of Generation Z, ages 18 to 27, and 44 percent of millennials, ages 28 to 43, who have a few decades ahead of them before becoming beneficiaries of the Security Social.
Social Security May Not Be Enough in the Not-So-Distant Future
According to the latest data from the Social Security Administration (SSA), the average monthly Social Security retirement benefit is currently $1,907, for an annual income of less than $23,000. It is estimated that the program has 67 million beneficiaries, that is, one in five residents of the United States.
But monthly benefits could be minimized if the program’s trust fund reserves dry up completely. Experts warn that this could happen in the next 10 years.
This year’s report from the trustees of the Social Security and Medicare trust funds on the financial status of both programs concluded that the Social Security trust funds could be depleted in 2035, a year later than expected last year.
Experts have repeatedly called on Congress to remake the Social Security program to make it more financially sustainable and maintain benefit levels, a move that polls show has the support of the American public. But overhauling the program is a politically complicated move that is likely to be accompanied by increased taxes on Americans.
The risk of not having another retirement account
“Not having at least one other retirement account is a risky position, especially because Social Security benefits, particularly at their current level, are not a long-term guarantee,” NerdWallet launches in its report. “It’s a good idea to shore up your personal finances to put yourself in a better position for an uncertain future.”
Americans, according to the company, should “start by saving something for retirement, regardless of their age or even whether they plan to retire or not” and keep the rest of their finances “in order,” paying off any consumer debt and saving a emergency fund.”
Social Security Administration (SSA)
The Social Security Administration, SSA, manages the national social insurance program comprised of the retirement, survivors, and disability insurance programs. SSA administers the Supplemental Security Income program for the elderly, blind, and disabled. Additionally, it is in charge of assigning Social Security numbers to individuals residing in the United States.
The Social Security retirement benefit is a monthly check that replaces part of your income when you reduce your hours or stop working altogether. It may not replace all of your income, so it’s best to identify other ways to pay your monthly expenses as you age.