Survey Says Majority of Adults Expect Retirement Income to Include Social Security

A new Wall Street Journal Online/Harris Interactive Personal Finance Poll out today is reporting that despite the general uncertainty regarding the solvency of Social Security, a majority (65%) of respondents expect Social Security to be a primary source of income during retirement.

However, as the age of respondents falls, the proportion of respondents who expect to rely on Social Security also declines. Forty one percent of those ages 18 to 34 say that Social Security will be a primary source as compared to 84 percent over the age of 55. Furthermore, only those ages 18 to 34 (59%) expect to rely on 401K plans more than Social Security, while those ages 35 to 44 expect to rely on Social Security and 401K plans equally (60% each).

These are just some of the results of an online survey of 4,037 U.S. adults conducted by Harris Interactive(R) from January 8 to 10, 2007 for The Wall Street Journal Online.

Single households are more likely to say their primary source of income will be their 401k plan (53%) rather than Social Security (50%). Three-fourths of those who are divorced, widowed or separated believe Social Security will be their primary source of retirement income; this group has a higher proportion of retirees in it, so it is interesting to note that they expected this government benefit to be their primary source. Those married are more inclined to cite their traditional pension plan (35%) and the equity in their home (21%) as primary sources. For those self employed or working full time, about two-thirds (65%) say their 401k will be a main income source, while half of part-timers (50%) will still rely on working during retirement.

Retirement Savings are not safe
Among respondents planning for retirement, nearly a third (31%) have tapped into their retirement savings for some unforeseen event. Respondents who are divorced, widowed or separated are more likely than their cohorts to have tapped into their retirement savings (49% vs. 31% total). Respondents who are already behind on retirement planning, particularly those earning less than $35K, are most likely to have dipped into their retirement savings (41% vs. 31% of total). The primary reasons for dipping into retirement savings include medical emergencies (17%) and being laid off (13%). Furthermore, over six in 10 respondents who have tapped into their retirement savings have not fully repaid their borrowings.

Preferences on deferred payment of taxes on retirement saving is unclear
Uncertainty seems to be the general sentiment on the payment of taxes with regard to retirement savings. More than one-third of respondents (35%) are unsure whether they should defer the payment of taxes. Among respondents who make under $35K, this uncertainty grows, with 48 percent saying they are uncertain when they should pay taxes. Younger respondents (43%) are more inclined to pay taxes as they accumulate wealth whereas those older prefer to defer (45%).

According to Harris Interactive and, the survey was conducted online within the United States between January 8 to 10, 2007 among 4,037 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.

All surveys are subject to several sources of error. These include: sampling error (because only a sample of a population is interviewed); measurement error due to question wording and/or question order, deliberately or unintentionally inaccurate responses, nonresponse (including refusals), interviewer effects (when live interviewers are used) and weighting.

With one exception (sampling error) the magnitude of the errors that result cannot be estimated. There is, therefore, no way to calculate a finite “margin of error” for any survey and the use of these words should be avoided.

With pure probability samples, with 100 percent response rates, it is possible to calculate the probability that the sampling error (but not other sources of error) is not greater than some number. With a pure probability sample of 4,037 one could say with a ninety-five percent probability that the overall results would have a sampling error of +/-3 percentage points. Sampling error for data based on sub-samples may be higher and may vary. However, that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated.

These statements conform to the principles of disclosure of the National Council on Public Polls.

We’ve posted these tables that show the results on our site.

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