Most Americans say they can't count on Social Security for retirement income

A new report shows an overwhelming three-quarters of Americans say they're wary of including Social Security benefits when planning their retirement income needs.

According to a study from Allianz Life, most Americans (74%) don’t believe they can depend on Social Security for retirement income and are concerned about their long-term finances. Meanwhile, 88% say it is critical to have a different source of guaranteed income beyond Social Security benefits in order to have a comfortable retirement.

The Allianz Life study comes on the heels of last week’s announcement from the Social Security Board of Trustees that the combined asset reserves of the Old-Age and Survivors Insurance and the Disability Insurance Trust Funds are projected to be depleted in 2034, one year earlier than projected last year, with 80% of benefits payable at that time. 

“The harsh reality is that Social Security was never meant to be the sole source of income for retirees," said Nina Lloyd, president and CEO of Opus Financial Advisors, a part of Advisor Group. "It is crucial to save, invest and plan for your own retirement.”

Kelly Famiglietta, partner at Charles Stephen, also a part of Advisor Group, said that Americans are right to fret over the long-term prospects of Social Security. 

“Social Security was not designed, and has not been updated, for our modern lives," she said. "You must calculate your retirement needs and come up with a plan on how to accomplish savings goals if you want to have the life in retirement that you have worked so hard for.”

More than 1,000 people ages 18 and older responded to the Allianz survey.

Despite their Social Security concerns, the Allianz report showed that fewer Americans than last year are worried about a major recession hitting the economy any time soon. That said, there is worry about unemployment, with 41% of respondents saying they are concerned they will be laid off because of an economic downturn this year.

When it comes to the stock market, cash remains king, with the study showing more than half (62%) of respondents say it's easier to have their money sit in cash rather than endure market volatility.

The study showed inflation also remains a top concern, with 78% of Americans worried that they might not be able to afford the retirement lifestyle they envisioned as a result of the increased cost of living, which is up from 73% last quarter and 68% in the first quarter of 2022. Meanwhile, 66% worry that if they don’t increase their retirement savings soon, it will be too late to have a comfortable retirement.

"One of the keys to building a solid retirement plan is to increase the number of things you can control. Social Security, unfortunately, doesn’t fall into that category because there are serious concerns about its long-term solvency. Besides that, Social Security alone will not provide a comfortable retirement for most investors,” said Josh Strange, founder and president of Good Life Financial Advisors of NOVA..

“A strong retirement strategy will ensure you have enough guaranteed income to cover your essential expenses," Kelly LaVigne, vice president of consumer insights at Allianz Life, said in a statement. "That guaranteed income can come from Social Security benefits along with other investments and protection products such as annuities.”