Social security is a main component of retirement planning, but a recent Cato Institute survey of about 2,000 Americans finds that while Social Security remains highly popular, most people are deeply concerned about its future. About 70% of respondents expect Social Security benefits to be cut, and nearly one-third (30%) believe the program won’t exist by the time they retire. A majority also feel younger workers are getting a “worse deal” than current retirees, and many say Congress has broken its promises in managing the program’s finances.
Despite broad support, with roughly 83% holding a favorable view of Social Security, the survey reveals widespread misunderstanding about how the system works and its financial condition. Most respondents underestimate how underfunded it is, and many don’t correctly understand how benefits are funded. When told benefits could face automatic cuts of nearly 25% starting in 2033 without action, a large share said the problem was more serious than they realized.
On policy solutions, most Americans oppose cutting benefits for current or future retirees and resist significant payroll tax increases when presented with specific dollar amounts. However, there is strong bipartisan support (around 71%) for creating an independent, nonpartisan commission to address Social Security’s long-term shortfall, reflecting frustration with political gridlock around reform.
For those unfamiliar, or simply in need of a refresher for retirement planning, here’s a quick overview of how Social Security works.
Social Security is funded primarily through payroll taxes. Employees contribute 6.2% of earnings, up to an annual income cap ($184,500 in 2026), with employers matching that amount. These funds are used to pay current beneficiaries, with excess contributions invested in Social Security trust funds. To qualify for benefits, most workers must earn 40 credits, which generally requires at least 10 years of work. In 2026, one credit is earned for every $1,890 in wages; you can earn a maximum of four credits per year.
Your benefit amount is based on your earnings history, total years worked, and the age at which you claim benefits. Social Security calculates payments using your highest 35 years of indexed earnings. While you can claim as early as age 62, doing so permanently reduces your benefit. Full Retirement Age (FRA) ranges from 65 to 67, depending on birth year. Claiming early can reduce benefits by up to 30%, while delaying past FRA increases benefits by 8% per year until age 70.
Understanding how benefits work, when to claim, and how Social Security fits into retirement planning has never been more important. Speak with a Federal Retirement Consultant who can help you make the most of your retirement income sources.
