Social Security has provided financial protection for Americans for over 80 years; however, a majority of Americans worry that benefits will run out in their lifetimes. Those fears have intensified as a result of the coronavirus pandemic.
According to a new survey by Nationwide, 71% of adults feel that way. Seven in 10 U.S. adults ages 25 and older worry that benefits will run dry in their lifetimes, as previously reported by GOBankingRates. These worries were the highest among Gen Xers at 83%, millennials at 77% and 61% of baby boomers. Meanwhile, 47% of millennials said they believe that “they will not get a dime of the Social Security benefits they have earned.”
Many Americans (59%) said they feel more discouraged since the onset of the pandemic, reports CNBC and an additional 19% said the pandemic has motivated them to reconsider plans for claiming benefits. At the same time, 11% plan to delay filing and 9% plan to claim earlier.
Social Security is funded through a dedicated payroll tax where employers and employees each pay a percentage (6.2%) of wages up to the taxable maximum. Self-employed individuals must the full percentage (12.4%) of earned wages. The last projection by the Social Security Administration suggested that those funds could run out by 2035, when 79% of promised benefits would be payable, reports CNBC. This projection did not take the effects of the pandemic into account.
“The likelihood of it going to zero is as close to zero as you can get,” said Joe Elsasser, founder and president of Covisum, a Social Security claiming company, reports CNBC. He also noted benefit cuts would be less than 25% if they happen at all.
Covisum recently released an online tool showing how Social Security benefit cuts could impact retirement income, as previously reported by GOBankingRates.
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