A new survey from a global investment firm recently uncovered a rare point on which Republicans and Democrats seem to agree: America faces a retirement savings crisis.
Only about half of American households have retirement savings accounts. The Social Security program may soon run short of funds, and those benefits were never meant to cover the full costs of retirement.
In an August survey, BlackRock asked 1,000 registered voters for their thoughts on retirement security in America. The responses transcended party lines.
When the survey asked voters if they think there is a retirement savings crisis in this country, 93% of Republicans answered yes, joined by 86% of Democrats and 94% of independents.
Three-quarters of Republicans said they are concerned about “not being able to maintain their standard of living” in retirement, joined by three-quarters of Democrats and a slightly smaller share of independents.
On questions of retirement security, Republicans and Democrats agree
The survey found broad bipartisan agreement on several other metrics of retirement security:
Republicans said they expect to need $2.1 million in savings to get through retirement, on average, compared with $2 million for Democrats and $3 million for independents.
Despite those lofty savings targets, roughly two-thirds of Democrats, Republicans and Independents in the survey report having less than $150,000 saved for retirement.
One quarter of Democrats and Republicans who responded to the survey said they have no emergency savings, along with 29% of independents.
The average Democrat and independent expects to retire at 64, the average Republican at 63.
BlackRock officials provided a detailed breakdown of survey responses by party affiliation in response to a request from USA TODAY. They said 45% of respondents were Democrats, 42% Republicans and 13% independents.
Retirement fears cut across party lines, even in fractious times
Retirement experts say retirement security is a universal concern, one that cuts across party lines, even in politically fractious times.
“Aging and preparing for a financially secure retirement is an ‘everybody’ issue and an ‘everybody’ opportunity. We’re all in this together,” said Catherine Collinson, CEO of the nonpartisan Transamerica Center for Retirement Studies.
Legislation on retirement security has also enjoyed “a long history of collaboration on both sides of the aisle,” Collinson said. She cited Secure Act 2.0 of 2022, which reaped bipartisan support. That measure rewrote many rules for retirement saving, with a goal of boosting retirement security.
The BlackRock survey provides fresh evidence of two major quandaries that face Americans who are in retirement or approaching it.
The first is a yawning gap between how much Americans save for retirement and how much they think they will need.
The second problem is a gap between when Americans expect to retire and when they actually retire. The average American retires at 62, according to two major retirement surveys. But the average over-50 worker expects to retire closer to 67.
From Harris and Trump, markedly different plans for Social Security
Former President Donald Trump and Vice President Kamala Harris have markedly different platforms on Social Security, a fund that is projected to run short in about a decade.
Harris pledges to “strengthen Social Security and Medicare for the long haul by making millionaires and billionaires pay their fair share in taxes.”
She would presumably follow the lead of President Joe Biden, who has vowed to raise new revenue by going after wealthy tax cheats and by raising tax rates on wealthy individuals and corporations.
Harris may also be alluding to the idea of extending the Social Security payroll tax to higher incomes, according to an analysis by Bankrate, the personal finance site. Workers don’t pay Social Security taxes on earnings above $168,600 in 2024.
Trump has “taken a more ambiguous stance” on Social Security, Bankrate reports, pledging to protect the benefits but not offering details on exactly how. Trump has made a case that economic growth and job creation would naturally boost payroll tax revenues, shoring up Social Security.
The Republican Party platform for 2024 includes a pledge to “fight for and protect Social Security and Medicare with no cuts, including no changes to the retirement age.” Trump has previously supported raising the American retirement age to 70.
When the candidates talk Social Security, older voters listen
Election-year surveys consistently suggest older voters are paying attention to what the candidates say about Social Security.
In a series of polls this summer, AARP has found that voters over age 50 in battleground states are more likely to vote for candidates who “commit to protecting Social Security,” among other issues.
“What they’re looking for is an acknowledgement” from the candidates “that they’re going to do what they can do to preserve Social Security for future generations,” said John Hishta, senior vice president of AARP. “That is one unifying issue that cuts across party lines.”
An annual retirement survey from Transamerica suggests the threat to Social Security ranks among the top five retirement fears of middle-class Americans in 2024.
“Our research finds that millions of Americans – tens of millions of Americans – are at risk of not being able to finance a secure retirement,” Collinson said. “And Social Security is the No. 1 issue on people’s minds.”
According to Transamerica research, the top priorities listed by middle-class Americans for the president and Congress are to fix Social Security’s funding shortfalls, to make health care and prescription drugs more affordable, and to ensure that all workers can save for retirement at work.
Wealthy Americans share many of the same fears about retirement. In a 2023 report, Transamerica found that retirement security rises with income – but only to a point. Even among Americans with more than $200,000 in household income, the report found, only 42% said they are “very confident” they can maintain a comfortable lifestyle in retirement.
“Even with objectively high net-worth individuals, the idea of retiring and starting to spend your own assets and the threat of running out of money is scary,” said Peter Lazaroff, a certified financial planner in St. Louis. “And it doesn’t matter what your politics are.”
As some Americans struggle to save for retirement, key 401(k) plan changes could soon make preparing easier for certain workers, experts say.
Enacted by Congress...
Thousands of farmers protested this week over changes to inheritance tax (IHT) announced in the Budget.
They say capping Agricultural Property Relief (APR) at £1m...
Social Security is a complex system. Run by the Social Security Administration (SSA) most people assume it is just retirees who receive checks ever month to cover...
