With Social Security in Jeopardy, How Do Americans Plan To Fund Retirement?

Stressed and Worried Senior Woman Calculating Domestic Expenses, Sitting at Dining Table in Front of Open Laptop Computer.
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Social Security is an important source of retirement income for most Americans, but the program continues to come under assault because of the amount of money that goes into funding it. Last year, about one-fifth of the federal budget, or $1.2 trillion, was expected to pay for Social Security, according to the Center on Budget and Policy Priorities.

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This kind of outlay has made Social Security a continuing target of fiscal hawks who aim to curb federal spending. Some U.S. lawmakers want to leverage the current debt ceiling crisis to get cuts to Social Security and Medicare funding.

Meanwhile, a recent analysis from the Congressional Budget Office projects that the balance in Social Security’s Old-Age and Survivors Insurance Trust Fund — which helps fund retirement benefits — will be depleted by 2033. When that happens, the program will be funded solely by payroll taxes, resulting in drastically reduced monthly payments for Social Security beneficiaries.

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Given these developments, it’s no surprise that many Americans plan to depend on a lot more than Social Security to fund their retirement.

Workers most often cite self-funded savings (45%) as their expected primary source of income in retirement, according to a 2022 retirement survey from Transamerica. That figure includes 32% who expect to rely on 401(k)s, 403(b)s and IRAs, and 13% who expect to rely on other savings and investments.

A lot depends on the type of work Americans do — and if they are even working at all. Only about one in four Transamerica survey respondents (23%) expect to rely primarily on Social Security in retirement. However, that figure rises to 33% for unemployed respondents vs. 22% for those who work for an employer and 23% who are self-employed.

Most Americans plan to use a combination of private savings, Social Security and other sources to fund their retirement.

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An earlier Transamerica survey of 3,109 working U.S. adults, reported by Mediafeed.org, found that these are the most popular ways Americans plan to fund retirement. Most respondents chose a combination of methods, which is why the responses don’t add up to 100%:

  • 401(k), 403(b) and IRA accounts (71% of respondents)
  • Social Security (66%)
  • Other savings and investments (48%)
  • Work income (37%)
  • Company-funded pension plan (26%)
  • Home equity (18%)
  • Inheritance (14%)
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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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