There are millions of seniors today collecting Social Security, and for many, those benefits no doubt spell the difference between paying the bills and going underwater. But those benefits have their limitations, and it's wise for pre-retirees to enter their golden years knowing what to expect from Social Security.

An estimated 72% of U.S. adults don't believe that Social Security will provide enough income to cover their spending in retirement, according to a new TD Ameritrade survey. And those same people are being realistic more so than pessimistic.

Senior man holding a dog.

IMAGE SOURCE: GETTY IMAGES.

Social Security's role in retirement

There's no question that Social Security plays a big role in helping seniors stay afloat financially. But one thing many folks fail to realize is that those benefits are not designed to sustain retirees without additional income.

Case in point: The average retired U.S. household spends $46,000 a year. Meanwhile, the average Social Security recipient collects a little over $1,400 a month, or just under $17,000 a year. Clearly, that's a pretty sizable gap. And the only way to bridge it is to have other income sources to tap on top of those benefits.

Here's another way to look at it: Once you retire, you can expect Social Security to replace about 40% of your previous income. Most seniors, however, need about double that amount to live comfortably. And when we think about the things that tend to cost retirees a lot of money, like healthcare, housing, food, utilities, clothing, and transportation, that makes sense.

In fact, another common misconception about retirement is that living expenses automatically drop during that period. But that's not always true, and in some cases, they even go up. That's why you need to secure at least one other major income stream on top of Social Security -- to avoid financial struggles when you're older and more vulnerable.

Supplementing your Social Security benefits

What income sources might you tap in retirement on top of Social Security? First, there's your nest egg, the size of which will depend on your saving and investing habits during your working years. Currently, you can contribute up to $18,500 a year to a 401(k) if you're under 50, or $24,500 if you're 50 or older. If you don't have access to a 401(k), you can contribute up to $5,500 annually to an IRA if you're under 50, or $6,500 if you're 50 or older.

Now, many folks don't come close to maxing out either account type on a yearly basis. But if you make a point of setting aside something each month, and give yourself a long enough savings window, you stand to come out with a decent pile of cash to access in retirement. The following table further illustrates this point:

If You Start Saving $300 a Month at Age:

Here's What You'll Have by Age 65 (Assumes an Average Annual 8% Return):

25

$932,000

30

$620,000

35

$408,000

40

$263,000

45

$165,000

TABLE AND CALCULATIONS BY AUTHOR.

Additionally, the 8% average return referenced above assumes a stock-heavy portfolio (8% is just below the stock market's historical average). Play it too safe, and your savings won't grow as substantially.

If you're lucky enough to have a pension through your employer, that'll be another income source to access when you're older. Similarly, if you're willing to work in some capacity or are able to generate rental income from a property you own, that's another way to supplement your Social Security payments. The key, however, is to go in knowing full well that those benefits alone won't cover the bills.

Though Social Security serves as a lifeline for so many retirees, it has its shortcomings. The fact that 72% of adults don't think it will cover all of their bills in retirement is a good thing, as it means they're better positioned to save independently or come up with another plan to avoid falling short later in life.

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