Retirement confidence falls, especially in Social Security: Poll

October 19, 2011

Talk about a race to the bottom: Which institution do you think is losing the trust of Americans to provide future retirement benefits most quickly – government, or private employers?

The winner is . . . private employers, but not by much. A new national poll on retirement sentiment by Sun Life Financial Inc. finds worker confidence in the future value of employer-provided benefits plunged 32 percent in the past year. Meanwhile, confidence in the government’s ability to provide Social Security and Medicare benefits fell 22 percent.

Sun Life’s fourth annual Unretirement Index points to a sharp deterioration in Americans’ overall confidence about their ability to retire. The survey’s overall retirement confidence index fell nearly 20 percent to an all-time low compared with a year ago. Like several other surveys this year, the poll underscores the national mood of deep worry about financial security, especially in old age.

Along with worries about workplace and government benefits, only 23 percent of working Americans said they are very confident that they will be able to meet basic living expenses in retirement — plunging from double that number (42 percent) last year. And one in five workers said they will never retire.

The falling confidence in employers to provide benefits such as defined benefit pensions or health insurance “reflects a sense people have that an employee benefit is discretionary,” said Wes Thompson, president of Sun Life Financial.

“But the broader underlying trend is a shifting of responsibility to the individual – whether it’s from government or employers. That starts with the shift in recent years from defined-benefit to defined contribution plans, and much greater dependence over the last 10 or 15 years on employees to contribute more for their health care. Now it’s spreading to other areas of employer-paid benefits, such as life insurance and disability benefits.”

Thompson thinks falling confidence in Social Security and Medicare stems from the “public policy debate in Washington.” Indeed, we’ve seen repeated calls this year for a higher Social Security retirement age, reduced cost-of-living adjustments and a higher eligibility age for Medicare.

But don’t confuse pessimism with lack of desire for the benefits. A survey for the National Committee to Protect Social Security and Medicare shows that Americans overwhelmingly reject the suggestion that Social Security contributes to the national deficit, or that benefits should be cut to reduce the debt. And that sentiment crosses all lines of political party, gender, race and age.

Considering the sorry state of every other aspect of retirement, is that really a surprise?

What do you think?

[poll id=”35″]


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If the people who have invested into Social Security want to see a return, entitlement reform will have to happen. The federal health law, which will expand coverage to 30 million currently uninsured Americans, will have little effect on the nation’s rising health spending in the next decade. Health spending will grow by an average of 5.8% a year through 2020 ( Currently Social Security and Medicare use 8.5% of nonentitle­ment revenues (federal revenues dedicated to all other programs besides the two). By 2020, the deficits will grow to almost 25%. This means that within 9 years, in order to pay projected benefits to retirees and the disabled, the federal government will have to stop doing about one out of every five things it does today (http://eng­.am/poetWU). The federal and state governments are projected to spend $466 billion on Medicaid this year, with costs rising about 8% a year (

All of the following solutions will substantially eliminate these problems: Reducing benefit payments by 5% AND increase the retirement age to 70 over time; increasing both the employee and employer contribution immediately by 1.1% for income up to $106,800 (its current limit); reducing benefit payments by 5% AND increase both the employee and employer contribution immediately by 0.05% each year for the next 20 years for income up to $106,800 (its current limit); removing the $106,800 limit and count all income towards the SS tax; decreasing the cost of living adjustment by 1% per year AND raise the retirement age to 67; or taxing income over $106,800 at 3%, index the retirement age to longevity AND decrease cost of living adjustment by 0.5% (

Posted by Carly_EngAmer | Report as abusive

I’ve just gotten my SS COLA. IT, pluse the medicar increase cost mr #23 a month. Yes, I’m getting $we a month LESS. I’ll do without, thank you :-(

Posted by Wyndhawke | Report as abusive