How secure should you be about Social Security?

Each year, the Social Security Administration makes available a statement that provides you with an estimate of the monthly benefits for which you'll qualify when you begin drawing on Social Security. (You can see yours online at But no matter how reassuring the numbers look on paper, questions are increasing as to whether these estimates will remain valid.

Simply put, it's a math problem — and it is predicted to only get worse if left unanswered.

The roots of the problem

When Social Security was created in the 1930s, the average person was not even expected to reach the full retirement age of 65.1 Though life expectancies have grown dramatically since then, the age at which benefits are paid out of Social Security has not risen to a comparable degree.

At the same time, the ratio of workers paying into the system to support each beneficiary has declined dramatically — from 17 workers per retiree in 1950 to a 3 to 1 ratio today — and is predicted to drop even further in the future.2

Whether or not Congress increases Social Security payroll taxes or expands the earnings that are subject to the payroll tax, some additional changes to the system may be inevitable to make it economically sound. For future retirees, Social Security benefits may be less than expected, due to increases in eligibility age, a reduction in benefits, or a combination of both.

Given this, it’s not surprising that, according to The Allianz Reclaiming the Future Study, nearly half of 44– to 49–year–olds say they have a better chance to be struck by lightning than get their full due from Social Security.1

The rise of the insured retirement solution

Regardless of what happens to the system, members of the post-boomer generations need to factor into their retirement planning the idea that Social Security may pay out differently from what is projected today, and to create their own source of supplemental income that is guaranteed for life, regardless of how long they live. Many in the boomer generation may also need a supplement to their Social Security income.

One solution that people are increasingly looking to are insured retirement solutions using annuities. These allow people to create a guaranteed income stream they can't outlive.

Insurers are in a unique position to help because only insurers can pool overall longevity and financial risk. That enables them to give people the opportunity to guarantee a stream of income that can last throughout retirement — even if they live beyond age 100.

As a leading provider of retirement solutions, Allianz Life Insurance Company of North America has been keeping its promises to customers for over 115 years.

1 Allianz Life Insurance Company of North America, "The Allianz Reclaiming the Future Study," 2010.
2 "The 2009 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds," May 12, 2009.

Guarantees are backed by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America and Allianz Life Insurance Company of New York, New York, NY. Variable annuity guarantees do not apply to the performance of the variable subaccounts, which will fluctuate with market conditions.

Products are issued by Allianz Life Insurance Company of North America, and in New York by Allianz Life Insurance Company of New York, New York, NY. Variable products are distributed by its affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297.

Product and feature availability may vary by state, and for variable products, by broker/dealer.