Washington, D.C. – At a time when both consumers and experts worry about Social Security adequacy and solvency, the Consumer Policy Center (CPC) is releasing a new report on this program that was written by a longtime expert on retirement programs and benefits.
The report – Social Security at the Center: The Last Consumer-Protective Retirement Benefit – and Why It Cannot Be Allowed to Fail – accomplishes the following:
- Defines Social Security as a consumer financial product and compares it favorably to other financial products;
- Documents how Social Security has become the most important source of retirement income and the major source of income for most retirees;
- Identifies the “actuarial gap” as a consumer protection crisis; and
- Suggests practical steps for increasing Social Security solvency, including the creation of a Social Security Commission.
“Social Security is doing more of the work with less private-sector support than at any point in its history,” said Dallas Salisbury, the report’s author and a senior fellow at the Consumer Policy Center. “Protecting, and even strengthening the system, is the most important consumer protection measure the federal government could take to preserve the financial security of older Americans.”
For decades, Salisbury headed the Employee Benefits Research Institute, a major source of information and analysis utilized by experts and policymakers. Salisbury has written numerous books and articles, and served on many boards, commissions, and advisory committees related to retirement benefit programs.
The report includes specific data on Social Security and other retirement income, highlighting a stark shift in the retirement landscape:
- Erosion of Traditional Pensions: Only 15% of all private-industry workers currently have access to a traditional defined-benefit pension plan.
- Low Retirement Account Balances: The median 401(k) balance among all current-employer participants at year-end 2023 was $15,448, which would generate approximately $45 in annuity income at 2026 rates.
- Declining Retiree Healthcare: Among large employers, the share offering any retiree health benefits fell sharply from 66% in 1988 to 24% in 2024.
- High Social Security Dependence: Three in five Social Security beneficiaries aged 65 and older (60%) rely on Social Security for at least half of their income, and approximately one in five beneficiaries receives all of their income from the program.
- High Market Replacement Costs: A single-premium immediate annuity paying $1,976 per month ($23,712 per year, the 2024 average benefit) for life with no inflation adjustment would cost a 65-year-old male approximately $380,000 to $400,000 at 2026 rates.
“Social Security is rapidly running out of funds while Americans increasingly depend on its solvency,” Salisbury added. “Three in five older Americans now depend on it for more than half their income, and one in five depends on it entirely.”
To address these compounding challenges, the report makes five key recommendations to policy leaders:
- Address the actuarial imbalance now through a combination of adjustments to the benefit formula (protecting lower-income workers), incremental increases in the retirement age, and a rise in the taxable wage base (capped at $176,100 in 2025).
- Support Social Security’s consumer-protective design features such as mandatory universal participation, inflation adjustment, survivor benefits, and the prohibition on pre-retirement cash-out.
- Strengthen the private supplement—such as the Saver’s Match, state auto-IRAs, SECURE Act provisions, and Trump Accounts—while recognizing they will always be supplemental, not a replacement for basic security.
- Inform Americans about the true value of Social Security compared to private market retirement investments, alongside the importance of structural tools like automatic enrollment, automatic escalation, and default annuitization.
- Establish a Bipartisan Social Security Commission with Administration and Congressional support to remove fractious politics from discussions and find structural solutions to one of the country’s major domestic challenges.
