Retirement 2.0blog

Many think Social Security checks won't be in the mail

Older Americans have greater faith in the retirement system

Oct 11, 2013 @ 12:01 am

By Mary Beth Franklin

In the midst of the federal government shutdown, with the threat of U.S. default on the horizon, a new survey finds that less than one-third of Americans expect to receive Social Security benefits when they retire.

Can you blame them? The political antics in Washington — and I live in the midst of the circus — doesn't inspire faith in our government.

When I logged onto the Social Security Administration website this week, the first thing I saw on the home page was a notice about “Important Information about the Federal Government Shutdown.”

The notice explained that due to the government shutdown, Social Security field offices would remain are open with limited services, but it promised that Social Security and Supplemental Security Income payments to beneficiaries would continue with no change in payment dates.

However, the site doesn't address what might happen if Congress and President Barack Obama don't resolve their differences in time to raise the nation's debt ceiling next week. It could affect the government's ability to pay the next round of federal obligations, including veterans' benefits and Social Security payments.

You can see what such shenanigans wreak havoc with public confidence.

Only 31% of American adults believe that Social Security will still be around when they retire, according to a new survey released Thursday by, an online legal information website.

The vast majority of Americans are less than confident that they'll ever see Social Security checks, according to the survey of 1,000 adults conducted using a demographically balanced pool. The survey has a margin of error of plus-or-minus 3%.

Americans are fairly split in their opinions, with roughly equal percentages believing they likely will or will not receive Social Security when they retire. The largest percentage — 39% — say they're not sure.

Not surprisingly, faith in Social Security rises as people get older. Among people between the ages of 18 and 24, only 11% expect Social Security to still be around when they retire. But even among middle-aged people, less than one-third expect to receive Social Security checks. However, nearly two-thirds — 64% — of those age 55 and older are confident that Social Security will be there for them.

Survey respondents who are currently retired say that they rely on their Social Security checks. The majority of retirees surveyed (56%) say that Social Security accounts more than half of their retirement income. In fact, 36% of retirees say that their Social Security check makes up more than 75% of their retirement income or is their sole source of retirement income.

Separately, the Center for Audit Quality's Investor Confidence Forum held in Washington this week found that investor confidence in U.S. capital markets reached a three-year high of 69% just prior to the government shutdown, but would drop to a record low of 39% if the U.S. government defaults on its financial obligations. (See also: It's the debt ceiling, stupid)

I believe the political crisis will be resolved in time to avoid massive federal payment disruptions and the collateral damage it could inflict on international relations and global securities markets.

But in the meantime, financial advisers have an even tougher job on their hands, calming their clients' concerns about their portfolio and defending the wisdom of delaying Social Security benefits until they are worth more later. This is precisely the type of bad behavior that prompts retirees to grab reduced Social Security benefits early, believing the bird in hand is the safer bet. (Don't miss: What to tell clients about the shutdown, debt ceiling issues)

But I still firmly believe that a well-planned Social Security claiming strategy is the bedrock of a solid retirement income plan. And the more advisers learn about effective Social Security claiming strategies, the better off their clients will be.

On a more personal note, my furloughed federal employee husband is running out of things to do.

He's already experimented with a sumptuous dinner of tapas and sangria to commemorate our recent anniversary trip to Barcelona and has cleaned the gutters along the roofline just in time for this week's torrential rains.

But now he's pacing around the house like a caged animal wondering when he can go back to work. Like other federal employees, he's barred from logging on to his e-mail or checking his Blackberry. We're all ready for the government shutdown to end.


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