73% of Americans fear Social Security will run out before retirement, survey finds

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Transamerica conducted a survey to learn more about workers’ retirement savings plans — here’s what they found. (iStock)

Americans are losing confidence in their ability to take advantage of Social Security benefits in retirement, says Transamerica’s 21st Annual Retirement Survey.

Nearly three-quarters (73%) of American workers worry that Social Security won’t be there for them when they retire, although 21% expect to rely on Social Security throughout retirement.

Less than a quarter (24%) of workers feel “very confident” in their ability to retire comfortably, according to the survey. They saved an average of $93,000 across all household retirement accounts, well below the amount experts recommend consumers should have saved. As a result, the majority of consumers (57%) plan to work in retirement, either full-time or part-time.

“Despite the immediacy of the pandemic and its challenges, it is remarkable that workers remain focused on their future retirement,” said Catherine Collinson, CEO and President of the Transamerica Institute. “Nevertheless, many are still at risk of not achieving long-term financial security.”

Keep reading to learn more about the study’s findings, as well as how to better prepare for retirement. And to help you reach your retirement goals, you can also visit Credible to compare a wide variety of financial products, such as debt consolidation loans and high-yield savings accounts.

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Half of workers said debt is holding back their retirement savings

About half of workers (49%) surveyed by Transamerica said debt interferes with their ability to save for retirement. In addition, one in six respondents (17%) said they had accumulated new credit card debt due to financial difficulties related to the pandemic.

Yet 62% of consumers cite deleveraging as a financial priority amid the COVID-19 pandemic:

  • 40% want to pay off their credit card debt
  • 31% want to pay off their mortgage
  • 16% want to repay their student loans

Credit card debt can be a costly burden that prevents consumers from reaching other financial milestones, including saving for retirement. Making the minimum payment on your credit card balances can save you from bad debts, but it comes at the high cost of credit card interest rates.

It may be possible to pay off credit card debt on better terms with a debt consolidation loan. It is a type of personal loan that you repay at a low, fixed rate in regular monthly installments. The average two-year personal loan rate is 9.09%, according to the Federal Reserve, compared to 16.44% for assessed interest credit card accounts.

If you’ve set a goal to pay off your debt before retirement, you can check out Credible to compare rates on several financial products, including debt consolidation loans, mortgage refinance, and student loan refinance.

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Emergency savings are ‘alarming’

An emergency fund is an important safety net that can help workers avoid dipping into retirement savings or incurring high-interest credit card debt for unexpected expenses. Nearly half (45%) of survey respondents said building their emergency savings is a current financial priority.

It is recommended that consumers have a solid emergency fund to cover approximately 3-6 months of expenses. And while the median emergency fund among working Americans is $5,000, the study found that lower-income Americans haven’t saved as much. Workers with a family income of less than $50,000 only have $250 set aside for emergencies.

If you’ve set a goal to build up your emergency savings, consider setting up direct deposit of your paycheck into a high-yield savings account that earns interest. You can compare savings account rates for free without affecting your credit score on Credible.

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Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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