Survey: Half of Workers Would Opt Out of Social Security If They Could

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A new survey by Sun Life Financial found that 48 percent of American workers would opt out of Social Security, even if doing so meant the loss of future Social Security benefits. Given the decline in the stock market over the past year, as well as the defeat of personal account-based Social Security reforms in 2005, this is a startlingly high number.

  • Workers in their 30s are most likely to favor not paying into the Social Security system, with 59% responding they would rather not pay the taxes and not receive benefits.
  • 51% of workers age 40-49 prefer to not participate.
  • I have long thought that the most compelling argument for Social Security accounts was not higher returns through stocks, but the security that comes through personal ownership.
  • 44% of workers age 50 to 59 prefer to not participate in the Social Security program, and 39% of workers 50 and older would rather not participate.
  • Even a significant amount of respondents who are nearing traditional retirement age would choose to stop paying Social Security taxes. One in three (33%) workers over the age of 60 said they would stop paying Social Security taxes even if it meant they would not receive any benefits.
  • Almost half (47%) of Americans with a household income of less than $25,000 would choose to opt out of the system, and 48% of those making between $25,000 and $50,000 a year would as well.
  • Slightly more than half (52%) of Americans making over $125,000 a year would choose to stop paying Social Security taxes and not receive the benefit.
  • 57% of men age 40 to 49 would opt out of Social Security, while 45% of women in that age group would choose to opt out.
  • 62% of men age 30 to 39 would opt out. Just over half (56%) of women age 30 to 39 would choose to opt out.

It reflects, in my view, not a confidence in markets or individual investment skills--both of which have been shown lacking in recent years--so much as a lack of confidence in the Social Security program, which has long faced significant deficits but which has also seen a similar lack of government action to correct them.

Now, for many of the workers surveyed opting out of Social Security would clearly be a bad idea. A worker nearing retirement today is almost sure to receive his full benefits, and could not hope to make up for them in the market. But again, this reflects a broad lack of confidence in the program, which may have transferred over due to government mismanagement of other sectors.

I have long thought that the most compelling argument for Social Security accounts was not higher returns through stocks, but the security that comes through personal ownership. (Unfortunately, the White House in 2005 focused on rate of return arguments, which are also factually dodgy.) Now, some will argue--not without evidence--that personal ownership of 401(k)s, homes and other assets did not protect Americans from the financial downturn. True enough. But I believe there is a strong, perhaps innate, preference for individual ownership that comes through even in difficult times. (And, as I've argued elsewhere, personal ownership has significant non-financial benefits to individuals and their communities.) This survey appears to buttress that view.

If and when President Obama chooses to address Social Security--and I have good reason to believe he will choose to do so--lawmakers on the right need to promote policies that address Social Security's significant financial shortfalls while retaining and strengthening its safety net against poverty in old age. The key to this, however, is also building significant new retirement savings by individuals. It is only if personal saving rises that Social Security can be reformed to hold the line on costs and target its mission more closely toward low earners. If Social Security continues to act as a de facto retirement saving vehicle for middle and high earners, program growth and significant tax increases are inevitable.

Andrew G. Biggs is a resident scholar at AEI.

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About the Author


Andrew G.
  • Andrew G. Biggs is a resident scholar at the American Enterprise Institute (AEI), where he studies Social Security reform, state and local government pensions, and public sector pay and benefits.

    Before joining AEI, Biggs was the principal deputy commissioner of the Social Security Administration (SSA), where he oversaw SSA’s policy research efforts. In 2005, as an associate director of the White House National Economic Council, he worked on Social Security reform. In 2001, he joined the staff of the President's Commission to Strengthen Social Security. Biggs has been interviewed on radio and television as an expert on retirement issues and on public vs. private sector compensation. He has published widely in academic publications as well as in daily newspapers such as The New York Times, The Wall Street Journal, and The Washington Post. He has also testified before Congress on numerous occasions. In 2013, the Society of Actuaries appointed Biggs co-vice chair of a blue ribbon panel tasked with analyzing the causes of underfunding in public pension plans and how governments can securely fund plans in the future.

    Biggs holds a bachelor’s degree from Queen's University Belfast in Northern Ireland, master’s degrees from Cambridge University and the University of London, and a Ph.D. from the London School of Economics.

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