Around half of all older Americans aren’t expecting much from Social Security. According to recent research from the Society of Actuaries, just 50% of pre-retirees expect their retirement benefits from this entitlement program to be a major source of income.
On the one hand, this is good news — if it means Americans are being realistic about what Social Security will do for them and are saving enough so they aren’t overly reliant on these benefits. On the other hand, if Americans aren’t ensuring they’ll have plenty of money to supplement Social Security, underestimating the limited role these benefits will play in retirement could be damaging.
Are you being realistic about Social Security?
According to the same Society of Actuaries report, while only about half of pre-retirees think Social Security benefits will be a major source of income, 64% of current retirees describe their benefits that way.
The likely reason for this discrepancy is that pre-retirees think they’ll get more money from other sources than current retirees actually end up with. For example, 37% of pre-retirees expect employer-sponsored savings plans to be a major source of retirement income. But just 13% of current retirees indicate money from this type of workplace plan actually is a major source of their funds after retiring.