A 56-percent majority of Americans say investing Social Security money in the stock market is too big a risk, according to the latest Newsweek Poll, while 36 percent of those polled (and 48% of 18-34-year olds) say it's a necessary risk to improve the rate of return of Social Security funds.
In President Bush's State of the Union speech this week, he said Social Security is facing a funding crisis and that by about 2040 the system will be bankrupt. Sixty-five percent of Americans polled agree. Bush proposed allowing part of Social Security payroll tax money to be diverted into individual savings accounts. Thirty-six percent of all those polled say they oppose Bush's proposed changes; 26 percent approve them and 30 percent say they're not aware of them.
The plan doesn't fare better in age group breakdowns, but the young are more likely to be evenly divided than older Americans: among 18 to 34-year- olds: 28 percent approve and 29 percent oppose, the poll shows. Among 35 to 44-year-olds: 28 percent approve; 33 percent oppose. Among 45 to 54-year-olds: 30 percent approve, 34 percent oppose and in the 55 and older age group, 22 percent approve and 45 percent oppose.
Thirty-nine percent of all Americans say they expect that Social Security will be able to pay all the benefits they are entitled to under current law when they retire, the poll shows. But 43 percent say they do not expect the benefits to be there. When broken down by age groups, the numbers for those who do not expect to get benefits are higher among younger Americans: 62 percent of 18 to 34-year-olds, 56 percent of 35 to 44-year-olds and 49 percent of 45 to 54-year-olds say they do not expect to get the benefits under current law. Forty-four percent of 55-year-olds and older believe they will get their full benefits.
In general, forty percent of all those polled say the best way to run Social Security is to tax one generation to pay for the retirement of another, the way the system has operated since it started in 1935. But almost as many (39%) say the best way is for the government to direct workers' money into the stock market in an effort to generate a higher rate of return on retirement savings. But there is a significant generation gap: 53 percent of 18 to 34- year-olds say using the market to get higher returns is the best way, rather than having one generation pay for the retirement of another; while, 54 percent of 55-year-olds and older say that the current system is the best way to fund Social Security.
To keep Social Security financially solvent in the future, 43 percent say they would support raising Social Security payroll taxes; 50 percent would not. (51% of Democrats favor raising Social Security payroll taxes, vs. 57% of Republicans opposing raising those taxes.) The one point where almost all of Americans agree is that they oppose cutting Social Security benefits to retirees. Only 12 percent of Americans say they would support cutting Social Security benefits to retirees; a full 85 percent would not, including: 83 percent of Republicans, 86 percent of Democrats, 84 percent of Independents; 82 percent of 18 to 34-year olds, 83 percent of 35 to 44-year olds, 85 percent of 45 to 54-year olds and 87 percent of those 55 years old and older.
If people's investments in Social Security individual retirement accounts perform poorly and lose money, 60 percent of those polled think the government should be responsible for protecting them in some way from that loss; 34 percent say it shouldn't be responsible.
This poll is part of the February 14 issue of Newsweek (on newsstands Monday, February 7). For this Newsweek Poll, Princeton Survey Research Associates International interviewed 1,009 adults aged 18 and older on February 3-4, 2005. The margin of error is plus or minus 4 percentage points.
Order Books on Social Security
"Saving Social Security (From Congress)," by Bert H. McLachlan
"Complete Idiot's Guide to Social Security," by Lita Epstein
