It’s a recipe for trouble, says RBC Wealth Management; while a majority of Americans say they will need to rely on Social Security benefits in retirement, most are not hopeful those benefits will be there.
The findings are from a survey commissioned by RBC and conducted by Ipsos in early October. The research shows more than seven in 10 (72%) Americans “think they will need to rely on Social Security in their retirement.” However, regardless of their need, more than half (55%) are not confident that promised benefits will be available when they need them.
This opinion is especially prevalent among Americans falling into Generation X, or those ages 35 to 54. As explained by John Taft, CEO of RBC Wealth Management U.S., the news a few weeks back that two popular Social Security claiming tactics will be eliminated only increased peoples’ anxiety.
Within Gen X, fully two-thirds of survey respondents said they “do not believe Social Security benefits will be there, regardless of whether they need them or not.” This compares to 55% of Millennials and 41% of Baby Boomers.
“It’s alarming that such a high percentage of the next generation of retirees has essentially given up hope that they will receive Social Security benefits,” adds Griffin Geisler, manager of the Internal Wealth Center at RBC Wealth Management—even more so because few are taking action today to cover the potential gap. Despite the significant changes made to the program under the federal budget deal, RBC is still stressing to clients that Social Security “should continue to be an important piece of their retirement income pie.”
RBC finds the recent changes to the Social Security program are expected to have the biggest impact on Baby Boomers—the group most likely (83%) to think they will need to rely on the benefits when they retire. Baby Boomers were also the group with greatest confidence that Social Security benefits will be available to them, highlighting their vulnerability.
“With no cost-of-living increase, and the elimination of popular tactics like ‘file and suspend’ and ‘restricted application,’ it’s more important than ever that retirees work with their advisers to plan the best course of action,” Geisler said. “While this survey echoes the concerns we hear from our clients, with the right strategy in place, Social Security will continue to play a significant role in assuring a comfortable retirement.”