The 401(k), Social Security and Role of IndividualsAbout half of all Americans surveyed view the 401(k) as the best retirement savings vehicle when asked to select from a list of options (52% among affluent; 49% among those with less than $250,000 in assets). Not surprisingly, affluent Americans contribute a higher percentage of their salary (median=12%) to their 401k plan than those with less than $250,000 in assets (median=7%). Additionally, affluent Americans expect Social Security to play a smaller role in their retirement than those with less than $250,000 in assets , who expect Social Security to cover a higher median percentage of their monthly retirement income (median=20% compared to 25%). However, both groups have similar expectations on the following:
- When asked to assign a proportion of responsibility for funding their retirement, the majority (50%) assigned responsibility to the individual through saving and investment, followed by the employer though a pension (25%) and by the government through Social Security (20% by the affluent and 25% for those with less than $250,000 in assets).
- They expect to begin taking Social Security payments at the median age of 65.
- Similarly among those not retired, majorities of affluent (78%) and those with less than $250,000 in assets, (71%) believe they will have the option of delaying the age at which they begin taking Social Security so that they’ll receive higher payments.
- Majorities of the affluent (54%) and those with less than $250,000 in assets (61%) are not willing to take a reduction in their Social Security and/or Medicare benefits even if it would help the country head towards a path to reduce its debt burden.
- Affluent women (45%) are more likely to be willing to take a reduction in their Social Security and/or Medicare benefits than women with less than $250,000 in assets (30%), but there is no such difference among the men in both groups (36/37%).