More Americans Cite Social Security as Major Source of Retirement Income

While 401(k)s and individual retirement accounts (IRAs) still seem to be the most important source of retirement income, the proportion of Americans planning on rely on Social Security in retirement is on the rise, according to a new Gallup poll.

The largest percentage of Americans still cited IRAs and 401(k)s as a major source of retirement income (45%)—but the percentage who cited Social Security (34%) was at the highest level since 2001, the first year the poll was conducted.

After IRAs and 401(k)s, respondents cited work-sponsored pension plans (23%), saving accounts or CDs (22%), home equity (20%), and individual stock investments (20%) as major sources of retirement income.

Prior to 2008, between 25% and 29% of non-retired Americans expected Social Security to be a major source of retirement funding, but that number has been at or above 30% in each of the last three years, according to Gallup.

Last year’s survey marked a low point for 401(k)s or IRAs (42%), but that number is back up this year. Gallup attributed the increase to gains in the stock market in the last year (see “Most Americans Now Anticipating Insufficient Retirement Income”).

The survey also found new lows in the percentage of non-retirees saying home equity (20%) and pension plans (23%) will be major sources of their retirement income.

For those who are already retired, the picture is different than what non-retirees expect. Social Security is the most common major source of retirement income (54%), followed by pension plans (37%), 401(k)s and IRAs (22%), and home equity (20%). That shouldn’t be surprising as the number of pension plans offered by employers has dwindled, making 401(k)s more prominent.

Results are based on telephone interviews with 1,020 adults in the U.S., aged 18 and older, conducted April 8 to 11. Retiree results were based on a sample of 354 retirees.