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The Average Social Security Recipient Today Only Gets This Much Income

By Maurie Backman – May 2, 2019 at 4:04PM

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Hint: It's really not enough to live comfortably on.

Millions of seniors today collect Social Security, and many rely on those benefits for the bulk of their income. If you're planning to do the same in retirement, then chances are, you're not doing much to save independently at present. But before you decide to settle on Social Security as your sole or primary retirement income source, know this: Those benefits were never designed to sustain retirees by themselves. In fact, the average recipient today collects just $1,461 a month, or $17,532 a year. If that doesn't sound like a whole lot of money to you (which it shouldn't), then consider this your wakeup call to start saving on your own.

Social Security's role in your retirement

The purpose of Social Security is to supplement your retirement income, not constitute your only source of it. If you're an average earner, you can expect your benefits to replace about 40% of your pre-retirement income. Most seniors, however, need close to double that amount to live comfortably, and when you think about the things retirees spend money on, it makes sense.

Older man in glasses reading a book outdoors


Just as you need a roof over your head, a means of transportation, food, clothing, and healthcare during your working years, so too do you need all of these things in retirement. The same holds true for things like utilities, cable, communications (think your cellphone and internet service), and even leisure. Therefore, it's silly to think that you'll get by on 40% of your former earnings while maintaining a standard of living that's similar to what you're used to today. And even if you are willing to cut back on some expenses, to live on Social Security alone would likely require some drastic changes -- changes you likely won't be happy with.

A better bet, therefore, is to work on building savings of your own while you can, and using Social Security as an additional source of income down the line. Currently, you can contribute up to $19,000 a year to a 401(k) if you're under 50, or $25,000 a year if you're 50 or older. If you don't have a 401(k) through work, an IRA is your next best bet, and you can put in up to $6,000 a year if you're under 50, or $7,000 a year if you're 50 or older.

Granted, if you're not used to saving any money at all, maxing out either account type may not be feasible, at least not initially. But saving even a modest amount of money over time can help you build a nice chunk of wealth for the future. Case in point: Saving $300 a month for 35 years will give you about $500,000 for retirement if you invest your savings at an average annual 7% return (which is more than doable when you have a long investment window). Make it $500 a month, and you'll be sitting on close to $830,000, all other things being equal.

Don't count on Social Security alone

Falling back on Social Security without your own savings is a good way to set yourself up for a financially stressful retirement. That said, if you're nearing your golden years without much savings and can't do a lot to catch up, you can at least be smart about boosting your benefits. This means waiting until your full retirement age (66, 67, or somewhere in between) to collect Social Security at the very least, or, more ideally, delaying benefits past full retirement age to increase them by 8% a year (which you can do up until age 70). You should also check your earnings record to make sure the Social Security Administration has the right information for you on file. The last thing you want is a lower benefit in retirement due to nothing more than a clerical error.

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