Three in 10 Americans are counting on Social Security benefits to support themselves through retirement, according to a new poll by NerdWallet, despite dwindling fund reserves that could mean cuts to their checks in the next decade.
The Harris Poll ran a survey on behalf of the personal finance company among 2,096 U.S. adults between July 11 and 15, asking respondents how they were preparing for retirement. The results are alarming: 31 percent of Americans said they don’t or won’t have a retirement account to draw from when they leave the workforce.
Roughly the same percentage—30 percent—said they think Social Security benefits will provide enough income for them to live comfortably throughout their retirement. That includes 46 percent of Gen Zers (aged between 18 and 27) and 44 percent of millennials (aged 28 to 43), who have a few decades ahead before becoming Social Security recipients.
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. The program is estimated to have 67 million recipients—one in five U.S. residents.
But monthly benefits could be cut if the program’s trust fund reserves become completely depleted. Experts are warning that might happen within the next 10 years.
This year’s Trustees of the Social Security and Medicare trust funds report on the financial status of the two programs found that funds in the Social Security trust could be depleted by 2035—one year later than forecasted last year.
At that point, the Social Security Administration expects beneficiaries to face a 17 percent cut in their benefits. That could be a painful setback for retirees who depend on the program’s benefits to put food on the table and pay their bills.
Experts have repeatedly called on Congress to reform the Social Security program to make it more financially sustainable and maintain benefit levels, a move that polls have proven has the backing of the American public. But reforming the program is a politically fraught move that is likely to be accompanied by raising taxes for Americans.
The NerdWallet poll’s results are a source of concern for personal finance experts.
“Not having at least one other retirement account is a risky position, especially because Social Security […] benefits—particularly at their current level—aren’t a guarantee long-term,” NerdWallet says 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 putting something away for retirement, regardless of your age or even whether or not you plan to retire” and keep the rest of their financial house “in order,” paying off any consumer debt and saving up an emergency fund.
