Younger Workers to Rely More on 401(k), Less on Social Security

February 26, 2007 ( - Most respondents to a recent survey foresee Social Security as the primary source of income in retirement, with younger respondents expecting to be less dependent on the program and rely more on 401(k) plans, according to a recent Wall Street Journal/Harris Interactive survey.

In particular, the survey of 4,037 adults found that 65% expect Social Security to be their primary source of income; 41% of those ages 18 to 34 say Social Security will be a primary source, compared to 84% of those over the age of 55. Fifty-nine percent of those between the ages of 18 to 34 expect to rely more on 401(k) plans than on Social Security to fund their retirement, while those between the ages of 35 and 44 plan to rely on Social Security and 401(k) plans equally (60%).

Other survey results on the reliance of Social Security versus 401(k) plans as the primary source of retirement income include:

  • Single households are more likely to say 401(k) plans will be their primary source (53%), compared to Social Security (50%).
  • Three-fourths of those who are divorced, widowed or separated believe Social Security with be their primary source of income and are more likely to have tapped into their retirement savings than other groups (49% vs. 31%).
  • Married respondents are more likely to cite their traditional pension plan (35%) and the equity in their home (21%) as primary retirenent funding sources.
  • For those self-employed or working full-time, 65% plan to mostly rely on their 401(k) plans, while part-time workers intend to continue working after retirement.
  • The primary reason for dipping into retirement savings include medical emergencies (17%) and being laid off (13%).

For a copy of the full report, go here .