Boomers' Dependence on Social Security Grows

  • Originally published April 18, 2011 , last updated December 31, 2015
Boomers' Dependence on Social Security Grows

Baby Boomers now rank Social Security as their most important source of retirement income, with 65% calling Social Security “extremely” or “very” important, according to a recent study by the Associated Press.

The study found that a significant portion (44%) of Americans between the ages of 45 and 65 do not feel confident that they will have the financial resources to live comfortably during their retirement. The study put the median retirement savings for Baby Boomers at $40,000. A startling 24% have saved nothing!

As a result, Boomers are putting increased emphasis on their Social Security income. When asked to rank different sources of income in terms of importance, Social Security was firmly at the top.

Social Security (65% extremely/very important)

A workplace retirement savings plan (42%)

An employer-paid pension plan (41%)

A personal savings account other than an IRA (35%)

Personal investments other than a retirement account (31%)

An IRA (31%)

Money from the sale of your home (17%)

Money from other family members (9%)

    As a financial advisor, this should trigger several questions in your mind:

    • “With such importance being place on Social Security income, wouldn’t it make sense for me to start helping my clients maximize their Social Security benefits?”
    • “What am I doing to make sure that my client’s financial plan works in concert with his or her Social Security income?”
    • “How could I use this interest in Social Security to market my business?”

    According to Dave Paulson, Chief Sales Officer for Transamerica, "Financial professionals must be well-positioned to help their clients navigate the often confusing aspects of the nation's Social Security system, and discuss the potential advantages of delaying these benefits. Social Security is a major part of retirement income planning for baby boomers, and it's imperative that financial professionals become knowledgeable on this subject to best serve these clients."

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