Americans continue to protest cuts in Social Security as a means to bring down the national deficit. It appears that some expect payments to be lower.
A new Gallup polls shows that retired people rely heavily on government payments, but those who are not retired say they will use other money to fund their lives after they leave work.
Investors who have yet to retire look to retirement accounts, such as 401(k), IRA, and Keogh accounts (74%), and stocks or stock market mutual fund investments (40%) as major funding sources when they retire, according to the latest Wells Fargo/Gallup Investor and Retirement Optimism Index survey. Social Security ranks sixth at 28%. In sharp contrast, current retirees say they depend on pension plans (49%) and Social Security (48%) as their top sources of income; retirement accounts rank third at 38%.
What the poll does not show, and it should not since questions about the fate of Social Security were not asked, is the extent to which there will be a pitched battle among workers to salvage full benefits as they retire. Politicians in general consider the subject taboo and a swift road to losing their jobs in Congress.
But, it may be that more and more Americans have become resolved to the realities of the nation’s finances. It is not a matter of debate that entitlement plans have grown faster than most other federal costs. It is not up for debate that without extraordinary GDP growth or deep military budget cuts the national debt could swell so large by the end of the decade that debt service alone will be $1 trillion a year.
The period may have begun when the national debate over the fate of Social Security will no longer be entirely one-sided. If that is true, the county’s economic future may not look quite as grim.
Methodology: Results for the Wells Fargo/Gallup Investor and Retirement Optimism Index survey are based on telephone interviews conducted as part of Gallup Daily tracking, with a random sample of 1,000 or more respondents, aged 18 and older, living in all U.S. states and the District of Columbia, selected using random-digit-dial sampling from Feb. 1-8, 2011
Douglas A. McIntyre