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Widespread Concerns About the Future of Social Security

Even as about half or more of Italians and Germans say the state should be mostly responsible for ensuring financial stability in old age, many in all three countries surveyed are skeptical that there will be enough money in their countries’ social security systems when they retire to provide benefits, even at a reduced level. All three systems are financed through worker contributions and, in Europe more than in the U.S., the growing number of older adults along with a shrinking pool of younger active contributors has made it difficult to fund pensions for current retirees.

Among those who have not yet retired, only 20% of Americans expect the Social Security system to have enough money when they are ready to retire to provide them with benefits at current levels. An additional 31% say they expect to receive benefits at reduced levels, and 41% think they will receive no benefits at all.

Germans and Italians are even more doubtful that their countries’ social security systems will be able to maintain their current levels of support. In Germany, 11% think they will receive benefits from the Gesetzliche Rentenversicherung (Germany’s equivalent to the U.S. Social Security system) at current levels, 45% think they will receive benefits at reduced levels, and 41% expect to get no benefits at all. Among Italians, only 7% believe there will be enough money in the Previdenza Sociale to provide them with benefits at their current levels, 29% expect benefits but at reduced levels, and fully 53% think they will not get any benefits.

Few Italians Saving for Retirement

If government benefits are reduced or not available, future retirees will need to rely even more heavily on their own personal savings. More than half of Americans (56%) and Germans (61%) who are not retired say they are putting money in a private retirement plan or other savings account aside from social security contributions. But in Italy, just 23% say they are doing this; fully 76% say they are not saving for retirement.

In all three countries, majorities of young adults ages 18 to 29 say they are not currently saving for retirement aside from social security contributions. Still, a substantial share of young adults in Germany (44%) and the U.S. (41%) say they are saving for retirement. By comparison, only 13% of young adults in Italy say they are saving for retirement. And even among Italians ages 50 to 64 –those who are closest to retiring – only 25% say they are putting money in a private retirement plan or other private savings account.

Men and women are equally likely to say they are saving for retirement, whether in the U.S., Germany or Italy. And across all three countries, saving for retirement is highly correlated with financial security. Those who say they live comfortably are among the most likely to report that they are saving for retirement beyond what they are contributing to social security, while those who say they do not have enough money to meet their basic expenses are among the least likely to be saving.

In fact, most adults who are not saving for retirement report that this is mainly because they do not have enough money to save right now, while relatively few say it is because they have not yet started to think about retirement. About two-thirds of Americans and Italians who are not currently saving for retirement say this is mainly because they lack the funds, as do about half in Germany.

From Pew Research.