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Newsweek
a day ago
- Business
- Newsweek
Americans Fear End of Social Security as They Know It
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Seven in 10 Americans worry that Social Security won't be there for them when they retire, according to new survey from the Transamerica Center for Retirement Studies (TCRS). TCRS is a division of Transamerica Institute (TI), a nonprofit, private operating foundation, and conducts one of the largest and longest-running annual retirement surveys of its kind. For generations, Social Security, which celebrated its 90th anniversary on August 14, has formed the bedrock of retirement income for tens of millions of Americans, and also pays out benefits to disabled people and survivors of deceased workers. However, despite its enduring popularity and importance, it faces a looming insolvency crisis that lawmakers have less than 10 years to solve. The survey from TCRS, which polled 10,009 adults above the age of 18 between September 11 and October 17, 2024, found that among non-retirees, 71 percent agreed with the statement: "I am concerned that when I am ready to retire, Social Security will not be there for me." Almost nine in 10 Americans (87 percent) have one or more greatest retirement fears, ranging from health to financial. The top two greatest fears are declining health that would require long-term care (39 percent) followed by Social Security being reduced or ceasing to exist in the future (37 percent). According to the latest report from the Social Security Trustees, the program's two trust funds—the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) funds—are projected to reach insolvency by 2034. At that point, benefits would be funded solely through incoming payroll taxes, triggering an automatic cut of around 21 percent unless Congress takes action. While several options have been tabled by lawmakers to fix the issue, such as The Fair Share Act and raising the retirement age, no meaningful progress has been made. Doug Carey, founder of WealthTrace and a chartered financial planner, told Newsweek that the main driver of fears around Social Security's longevity is this political inaction. "I believe it's the political climate and the lack of action over many administrations," he said. "Most politicians do not want to touch benefits since they believe it will only hurt their reputation and reelection chances now. That is why this keeps getting pushed into the future until it simply has to be addressed." Stock image/file photo: An elderly woman holding an empty wallet. Stock image/file photo: An elderly woman holding an empty wallet. GETTY The study also revealed Americans are concerned about seeing their personal savings through their post-working years. Sixty-three percent of Americans said they either believe they won't save enough to meet their needs by the time they retire or, if already retired, they failed to save enough—28 percent "strongly agree" and 35 percent "somewhat agree" with that statement. And for nearly a third of Americans—32 percent—Social Security is expected to be their primary source of retirement income. That compares with 29 percent who expect to rely primarily on retirement accounts, 12 percent on other savings and investments, and 11 percent on continued work. Only 9 percent see a company-funded pension as their main income source. The survey also showed that reliance on Social Security is even greater among retired women with six in 10 women retirees (59 percent) indicating it is their primary source of income, compared with 47 percent of men retirees. For those not yet retired, 29 percent of women and 22 percent of men said Social Security was their expected primary source of retirement income. Carey added that many Americans are already adjusting their retirement plans based on the assumption of reduced benefits. "What many people are doing is simply assuming their benefits will be cut by anywhere from 25 percent to 50 percent. They can then plan accordingly by retiring later, saving more, or changing their planned spending in retirement," he said. Some, Carey noted, choose to claim benefits early at age 62 to "lock in" payments, believing they are less likely to be reduced once started. Jackson Ruggiero, co-founder of told Newsweek that the poll's findings are unsurprising. "The program is facing real financial challenges, but just as importantly, people don't trust Congress to fix it in time," he said. "Because of this uncertainty, many people are changing how they plan for retirement. Younger workers especially are focusing more on personal savings through 401(k)s and IRAs, and some are assuming they'll get little or nothing from Social Security. That's understandable, but also a bit extreme." Looking forward, Ruggiero advised a balanced approach for those concerned about their retirement savings and the future of Social Security. "Plan like your benefits might be reduced, not gone. Save what you can now, take advantage of employer retirement plans, and if possible, delay taking Social Security to get a bigger monthly check," he said. Both experts agreed on one point—Congress is moving too slowly to fix the looming insolvency dilemma. "They are doing nothing, and I predict they won't do anything until the year where it's clear Social Security benefits will have to be cut. Currently that is 2033," Carey warned. This is not the first time Social Security has faced a funding cliff. In the early 1980s, the trust funds were similarly close to depletion. Lawmakers responded with reforms that included faster payroll tax increases, a gradual rise in the retirement age, and taxation of some Social Security benefits. "Social Security has served as the cornerstone of retirement income since its establishment nine decades ago. It provides millions of older Americans with guaranteed income, so that they can retire with greater financial security," Catherine Collinson, CEO and president of Transamerica Institute, said. "With the estimated depletion of the Social Security trust funds looming large, now is the time for policymakers to identify reforms that can help ensure the program's sustainability for the next 90 years."
Yahoo
24-07-2025
- Business
- Yahoo
People Think They Need $4 Million To Retire Comfortably — Can You Guess How Many Really Have That Much?
You know how a million dollars used to sound like the ultimate goal? These days, it barely turns heads — especially when it comes to retirement. Now, $4 million is being tossed around as the new benchmark for a "comfortable" retirement. But the reality is, very few Americans are anywhere near that kind of wealth. According to Federal Reserve data, to be in the top 5% of U.S. households, you'd need about $1.17 million in total net worth. The top 2% starts around $2.7 million — and to break into the top 1%, you'd need a staggering $11.6 million. That means someone with $4 million in net worth falls comfortably above the top 2%, but still far from the 1% threshold. Based on this range, it's fair to estimate that only about 1.3% to 1.5% of U.S. households have $4 million or more in total net worth. Don't Miss: Be part of the breakthrough that could replace plastic as we know it— $100k+ in investable assets? – no cost, no obligation. And remember — that includes everything: home equity, retirement accounts, business assets, and personal property. It's not what's sitting in your 401(k). So when surveys suggest Americans need $4 million just to retire, they're aiming higher than nearly 99% of the country ever reaches. So how did $4 million become the retirement magic number when so few people have it in any form? $4 Million Retirement Myth A 2023 New York Life survey found that the average American worker now believes they'll need $4.3 million to retire comfortably. That's not just the wealthy talking — that's everyday people. And it reflects a growing anxiety about the cost of living, inflation, healthcare, and longevity. The problem? Very few people are even close. According to the Federal Reserve's Survey of Consumer Finances, the average retirement savings among Americans is about $334,000 — but the median is far lower, at just $86,900. That paints a much more sobering picture of where most people actually stand. Even having $1 million saved for retirement puts you in the top 3.2% of savers. So the idea that $4 million is "normal" or "necessary" might be more myth than fact. Trending: This AI-Powered Trading Platform Has 5,000+ Users, 27 Pending Patents, and a $43.97M Valuation — Most People Don't Know What They'll Need The confusion is understandable. Most people don't actually know how much they'll need — or when they'll retire. You might have a timeline in mind, but life doesn't always follow the plan. In fact, 58% of workers end up retiring earlier than expected, often due to unforeseen circumstances, according to research from the Transamerica Center for Retirement Studies in collaboration with the Transamerica Institute. Part of the issue is the heavy reliance on retirement calculators — those sleek tools many people plug their age and income into hoping for clarity. But many of these calculators are built by investment firms that have a vested interest in encouraging people to save more and invest more. They often assume luxury-level lifestyles, long retirements, and no other income sources like Social Security. That means these tools can overshoot what's actually needed — leaving users discouraged and feeling like they're impossibly behind. What Do You Really Need? Truthfully, the amount you'll need to retire depends on a mix of personal factors: Where you plan to live Your desired lifestyle Healthcare needs How long you plan to work Other income sources like pensions or Social Security Many financial experts agree that a more realistic retirement target for most Americans is somewhere between $1 million and $2 million — not $4 million. That's still a hefty number, but far more achievable over time, especially when combined with other income sources or downsizing let's not forget what Warren Buffett famously said: "If you don't find a way to make money while you sleep, you will work until you die." Passive income — through dividends, rental property, or even part-time work — can significantly stretch retirement dollars. So What's the Move? If $4 million feels out of reach, you're not alone — and you're not doomed. The key is consistency over perfection. Saving regularly, investing smartly, and avoiding lifestyle inflation can go a long way. And if you're not sure where to start, talking with a financial advisor can help put your actual retirement needs into perspective — not some one-size-fits-all online projection. Because at the end of the day, it's not about hitting an arbitrary number. It's about being able to retire on your terms — and live well doing it. Read Next: Can you guess how many retire with a $5,000,000 nest egg? . Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article People Think They Need $4 Million To Retire Comfortably — Can You Guess How Many Really Have That Much? originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
15-07-2025
- Business
- CNBC
Just 30% of workers expect to save $1 million or more for retirement. Here's how to boost your balance
American workers who participate in a retirement plan expect to need an average $1.28 million set aside to retire comfortably, according to a new survey from investment management company Schroders. Yet just 30% of workers say they expect to have $1 million or more by the time they retire, the survey found. About half, 48%, expect to have less than $500,000, and 26% expect to have less than $250,000. Other studies point to similar challenges, with Transamerica Center for Retirement Studies reporting that 68% of workers say they could work until retirement and still not have enough saved. Feeling behind can prompt financial insecurities, including a fear of running out of money in retirement, according to Schroders. Schroders' survey was conducted between March and April and included 1,500 investors, including 602 retirement plan participants. More from Personal Finance:Here's how much more expensive back-to-school shopping is in 2025Tax changes under Trump's 'big beautiful bill' — in one chartHow 'revenge savings' can boost your bottom line Yet with competing financial priorities, workers may be tempted to prioritize their immediate needs over future retirement goals, according to Deb Boyden, head of U.S. defined contribution at Schroders. "People think here and now, 'I need that money to cover whatever expense that is hitting at this point,'" Boyden said. Experts say there are several moves workers can make to help nudge their retirement balances higher. While surveys may tout the grand total aspiring retirees think they need to have saved, experts say there's another number that should be a priority instead — their retirement savings rate. That's the share of pay that employees set aside, plus company contributions. If a 401(k) or other retirement savings plan provides an employer match, experts generally say workers should contribute at least enough to reap the benefit of that free employer money. The average promised match was 4.6% of pay in 2024, according to Vanguard's latest annual report on defined contribution plans. Yet to achieve a meaningful sum set away for retirement, experts say having a high savings rate is crucial. The ideal target savings rate may range from 12% to 15%, including company contributions, according to Vanguard. In 2024, the average 401(k) savings rate was in the low range of that sweet spot at 12%, including both employee and employer contributions, Vanguard's report found. Workers may be tempted to tap their 401(k) or other work retirement plan if they're short on cash. Around 17% of savers said they have borrowed from their retirement plan, the Schroders survey found. Among the reasons for tapping those funds included paying for unforeseen expenses or emergencies, paying down credit card or other debts, keeping up with a higher cost of living, purchasing a home or paying for medical care, according to the survey results. While workers who take 401(k) loans may avoid taxes and penalties that come with withdrawals, they still lose out on the gains the money would have made if it had stayed invested. Importantly, if those borrowers leave or lose their job, they could be on the hook to repay those loans quickly. To help avoid the temptation to borrow from retirement savings, workers may strive to build emergency savings that can serve as a buffer when cash needs arise, Boyden said. Nearly one-third of investors — 31% — say they don't know how their retirement money is invested, Schroders found. For those who do know, equities were the most popular retirement investment, with 31%. Meanwhile, cash came in second, at 23%, followed by fixed income with just 16%. Other allocations cited by respondents included target-date funds, which customize asset allocations based on a determined retirement date, as well as other miscellaneous investments. While higher interest rates have made it possible to earn higher returns on cash, investors with a long-term time horizon would be wise to have higher allocations to equities and other investments that provide more potential upside. Retirement savers who are tempted to play it safe and hold more cash may want to consider how long the lump sum they have set aside may last, Boyden said. By keeping their long-term goal in mind, they may feel more comfortable taking on more risk now, she said. Ideally, investors would reassess those allocations quarterly, Boyden said.
Yahoo
24-06-2025
- Business
- Yahoo
Majority of workers say they'll reach retirement without enough savings
This story was originally published on HR Dive. To receive daily news and insights, subscribe to our free daily HR Dive newsletter. A majority of workers across generations — 68% — said they believe they could work until retirement and still not have enough money saved to meet their needs, according to a June 18 report from the Transamerica Center for Retirement Studies and Transamerica Institute. In a survey of more than 5,000 U.S. workers, 80% said their generation will have a harder time achieving financial security than their parent's generation. 'The single most important ingredient for workers to achieve a financially secure retirement is access to meaningful employment with retirement benefits throughout their working years,' said Catherine Collison, CEO and president of the Transamerica Institute and TCRS. 'Amid workforce transformations and the evolving retirement landscape, resilience is imperative. Workers must have the know-how and resources needed to navigate an uncertain future.' Across generations, workers feel burned out from working more than one job, having a side hustle or serving as a caregiver for a relative or friend. Most workers reported concerns about making ends meet and saving for the future. Most generations shared the same top financial priorities, such as paying off debt, saving for a major life event, covering basic living expenses, building an emergency savings fund, saving for retirement, supporting parents and supporting children. For instance, only 18% of Gen X workers said they feel 'very confident' they'll be able to fully retire with a comfortable lifestyle, and only 23% said they 'strongly agree' that they're building a large enough retirement fund. Many plan to work beyond the traditional retirement age to bridge savings gaps, with 39% expecting to either not retire or to retire at age 70 or older and 56% planning to work during retirement. Similarly, 57% of baby boomers expect to retire at age 70 or older or don't plan to retire. They said they're most worried about declining health that requires long-term care, outliving their savings and that Social Security will be lower or not exist in the future. Half of women retirees said retirement has been more expensive than they expected, according to a Morning Consult and Corebridge Financial survey. Although half said their financial health is good, nearly two-thirds said they wish they would have started saving sooner. As more employees decide to retire later, they're also focusing on the transition to 'pre-retirement,' or a transition period between full-time work and full retirement, according to a Human Interest report. The pandemic changed workers' approach to savings, retirement age and pre-retirement. In addition, workers say wage stagnation and higher costs have hindered life milestones, according to a Zety report. Half said they don't feel able to start a family or grow them, 40% said they aren't able to save for retirement, and 37% said they can't afford to buy a home. Recommended Reading Job satisfaction reaches record high — but not for younger workers, survey finds Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-05-2025
- Business
- Yahoo
4 Things Your Neighbor Who Retired Early Won't Tell You About Their Financial Plan
Retiring early may seem like a dream come true. And for some, it is — but often not for the reasons you might think. While more than half (58%) of workers retire earlier than planned, it's frequently due to unforeseen life events, according to research from Transamerica Center for Retirement Studies and Transamerica Institute. For You: Check Out: If you're looking to retire early and want to do it on your own terms, now is the time to take a closer look at your finances and long-term plans. GOBankingRates spoke with some financial experts to uncover the things your neighbor who retired early probably won't tell you about their financial strategy. Dr. Annie Cole, a financial coach and founder of Money Essentials for Women, is a professional on track to retire in her 40s. One of her top tips is to make it a habit to invest early and often, no matter how much you earn. 'Even when I was making $26,000 a year and struggled to pay my rent and buy groceries, I still set aside $20 every month in my retirement account,' Cole said. 'Investing is more about habit than the amount. If you can't get yourself into the habit, you'll have a hard time ever reaching your retirement goals.' Explore More: Cole also emphasized the importance of increasing your income — including passive income sources. 'I switched jobs every few years, advocated for raises and title changes and created multiple side hustles and businesses of my own to turn my unique skill set into income streams,' she said. 'Think about one of your unique skills or strengths that you can turn into a consulting service, freelance offering, online course or ebook.' In other words, early retirees aren't just good savers. They're also active earners who diversify where their money comes from. Many early retirees are quick to highlight their income streams, like rental properties or dividend-paying investments. But what often goes unspoken is how carefully they've planned for risk. Filip Telibasa, certified financial planner (CFP) and owner of Benzina Wealth, said that behind the scenes, early retirees tend to be very intentional about protecting their financial stability. That includes building in safeguards like insurance coverage, long-term healthcare planning well before Medicare eligibility age, and a solid estate plan. 'These aren't flashy topics,' Telibasa said, 'but they're critical for staying retired once you get there.' Without those protections, even the best-laid early retirement plan can quickly fall apart. One of the biggest challenges of retiring early is handling unexpected expenses and financial setbacks without a steady paycheck. That's why it's crucial to build flexibility into your budget. Kevin Estes, certified financial planner (CFP) and founder of Scaled Finance, advises retirees to simplify their lifestyle, paying only for what truly matters to them and cutting expenses where they can. That might mean moving to a smaller home, doing your own yard work, and cooking at home instead of dining out. These everyday trade-offs aren't just about saving money — they're about creating a financial cushion for when those surprise expenses inevitably come up. Whether it's a medical bill, a family emergency or a home repair, having a little room in the budget can make the difference between a minor setback and a major disruption. As Telibasa put it, 'The people who pulled it off early made a thousand little smart, often invisible, decisions. It's less about hitting the lottery and more about consistency, automation, and a clear sense of what matters most to them — both now and in the future.' More From GOBankingRates 4 Things You Should Do When Your Salary Hits $100K If a Financial Advisor Doesn't Ask These 5 Questions in Your Consult, Keep Shopping 5 Steps to Take if You Want To Create Generational Wealth Robert Kiyosaki: 5 Money Habits of People Who Retire Early Sources: Transamerica Center for Retirement Studies, 'Retiree Life in the Post-Pandemic Economy' Dr. Annie Cole, Money Essentials for Women Filip Telibasa, Benzina Wealth Kevin Estes, Scaled Finance This article originally appeared on 4 Things Your Neighbor Who Retired Early Won't Tell You About Their Financial Plan Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
