Social Security Concerns Continue to Plague Future Retirees - FA Magazine
Since the 2025 Social Security trustees’ report hit the airwaves a few months ago, quite a bit has been written about the program’s financial future. Not too much of it has been positive, for sure, and a recent survey from Transamerica Institute clearly underscores how Americans view the matter.
The Transamerica Institute study reports that reliance on Social Security benefits is a factor in 69% of future retirees’ planning. Whether it’s total reliance or partial reliance, the fact remains that the thought of a 20% to 25% reduction in the very near future appears disruptive for those looking ahead to their financial survival in their later years. Transamerica CEO and president Catherine Collinson puts a fine point on the matter with these concerns: “Americans are anxious about the future of Social Security and what might happen to their benefits.”
It’s not just the impact on benefits…it’s the inability to prepare
Dreading the substantial reduction in benefits that could happen is one thing; being unable to prepare for it is quite another. Financial Advisor Magazine’s Karen DeMasters provides an analysis of the Transamerica survey results in a post on their website (click here to read it in full), focusing attention on statistics indicating a level of unpreparedness for what, for many, could be a long retirement. “Many near retirees have meager savings to fall back on. People who are not yet retired have saved $51,000 on average in total household retirement accounts, the survey showed. On average, retirees have an estimated median savings total of $126,000, excluding home equity.”
Thoughts on fixing the problem
Ms. DeMaster’s post includes a recap of the Transamerica survey’s findings on suggestions to address Social Security’s looming insolvency, with four specific areas considered appropriate: increasing the cap on taxable earnings, increasing the FICA rate, preserving benefits for the most vulnerable, and raising the retirement age. There are, of course, many other suggestions on the drawing board, including the AMAC Social Security Guarantee proposal and hundreds of others that can be found on the SSA.gov website.