Social Security Can't Save Your Retirement, but These Moves Can

No savings for your golden years? Banking on Social Security isn't the answer; you'll need to make more of an effort than that.

Maurie Backman
Maurie Backman
Jul 11, 2019 at 6:48AM
Investment Planning

Retirement can be an expensive period of life, especially for seniors who encounter health issues that produce massive bills. Unfortunately, many retirees wind up relying on Social Security to cover their living expenses, even though those benefits aren't supposed to serve as seniors' sole source of income.

If you were an average earner, Social Security will replace around 40% of your former income. But most seniors need about double that amount to live comfortably without having to scrimp on modest luxuries like cable TV or the occasional movie or museum visit. Thus, it takes independent savings to ensure a comfortable lifestyle in retirement.

Unfortunately, however, a frightening 42% of U.S. adults aren't saving money for their golden years at all, according to the Center for Financial Services Innovation. As a result, they're apt to become extremely reliant on Social Security once their careers draw to a close.

Senior man with serious expression against a gray background

IMAGE SOURCE: GETTY IMAGES.

Now, the bad news is that if you don't have any savings going into retirement, your Social Security benefits can't bail you out. But here are a few ways you can make an otherwise dire situation more manageable.

1. Work longer

You can't go back in time and put money into a retirement plan you never funded. But if you're nearing the tail end of your working years and don't have savings earmarked for your golden years, your best bet is to extend your career as much as you can. Doing so can serve a couple of key purposes. First, it gives you an opportunity to save a small amount of money that could come in very handy down the line. Secondly, it gives you a chance to grow your Social Security benefits.

Though your benefits are calculated based on your 35 highest-paid years of wages, the age at which you file for Social Security can cause your benefits to drop or grow. If you file at full retirement age, which is either 66, 67, or somewhere in between, you'll get the precise monthly benefit your earnings record renders you eligible for. If you file before full retirement age, you'll reduce your benefits -- and when you don't have any savings, that's not good. But if you work longer so that you're able to delay benefits past full retirement age, you'll boost them by 8% a year up until age 70. Granted, they still probably won't be enough to live on, but a substantial increase will help.

2. Get a part-time job as a senior

When you've worked hard all your life, you may not want a job in retirement. But if you're heading into your golden years with no independent savings, you may have no choice but to generate income by physically working for it.

That said, you don't need to resign yourself to a job bagging groceries, fielding customer service calls, or dealing with clerical work in an office. Retirement is actually a great time to start your own business, and aside from bringing in money, it'll give you something meaningful to do with your time.

3. Adjust your lifestyle

You might manage your housing costs, car payments, and various bills on your full-time salary. But even if you're able to grow your Social Security benefits and get a job in retirement, that still may not be enough income to keep up with the lifestyle you're accustomed to. The solution? Change your plans. Move to a less expensive part of the country (one where your Social Security income can go further), and live frugally by cooking at home and exploring free entertainment. It's a far better bet than falling behind on your bills because the only income you have is Social Security.

If you spend your entire career neglecting your retirement savings, know that Social Security can't be the lifeline that saves you. What you can do, however, is work longer, get some sort of part-time job during retirement, and make lifestyle changes to accommodate your financial circumstances. It's a far better bet than banking on benefits that will only get you so far.