Prepare yourself for some startling Social Security statistics: According to the Social Security Administration (SSA), Social Security benefits on average make up about 30% of elderly Americans' income. More specifically, among elderly beneficiaries, about 37% of men and 42% of women get 50% or more of their income from Social Security, while more than 10% get 90% or more of their income from it.

Here's a look at how much Social Security covers in retirement.

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Image source: Getty Images.

How much are Social Security benefits?

For the best estimate of how much you will receive in Social Security benefits in the future, head over to the SSA website and set up a "my Social Security" account. Then you can log in anytime to see the latest SSA estimates of how much you'll receive based on your earnings history and when you start collecting.

But here's some context: The recent average monthly Social Security retirement benefit was $1,559 -- or about $18,700 per year. Based on U.S. Census data, the median income for an individual in 2020 was about $41,535. So the average Social Security benefit would replace about 45% of that.

Imagine trying to live off of 45% of what you're earning now. It probably won't be easy. Indeed, the 2021 poverty threshold was $12,880 for a single-person household, not that far from the Social Security average. (Remember, too, that $18,700 is the average Social Security annual benefit -- meaning that many millions live on less, and often far less.)

How much of your needs will Social Security cover?

So how much of your particular income needs will Social Security cover? Well, it depends on how much Social Security income you expect to receive, and how much income you expect to need in retirement. It's worth spending a little time with paper and pencil (or computer and keyboard) to arrive at an educated guess about how much income you'll need.

Be as thorough as you can in your thinking, factoring in not just food and housing, but also utilities, taxes, insurance, transportation, internet and phone costs, travel, gifts, clothing, hobbies, and so on. Don't forget healthcare, which by one estimate from Fidelity Investments will cost an average of $300,000 throughout retirement for a 65-year-old couple retiring today. (And that doesn't include long-term care or dental expenses.) There are ways to keep healthcare costs down, such as staying as healthy as possible, so aim to do what you can. And otherwise, try to factor in major expected healthcare costs, just to be on the safe side.

If you determine that you'll need around $80,000 annually in retirement and you are expecting to receive around $30,000 in Social Security benefits, that leaves $50,000 in income that you need to generate on your own, perhaps via a combination of investments, dividend income, an annuity, and if you're lucky, a pension. If you're married or in a household with multiple retired people, your financial life should be a bit easier, with multiple Social Security checks arriving each month.

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You can increase your income in retirement

Here's some more good news: There are a bunch of ways to increase your Social Security benefits, many of which are best put into action while you're still working. You can work more, for example, to boost your earnings and therefore your future benefits. You might also delay starting to collect your benefits if you can, as that will increase them, too.

And, of course, you can (and probably should) be saving and investing for your retirement on your own -- using tax-advantaged retirement accounts such as IRAs and 401(k)s and regular savings and investment accounts. Here's a look at how much you might amass over time:

Growing at 8% for

$5,000 Invested Annually

$10,000 Invested Annually

$15,000 Invested Annually

5 years




10 years




15 years




20 years




25 years



$1.2 million

30 years


$1.2 million

$1.8 million

35 years


$1.9 million

$2.8 million

40 years

$1.4 million

$2.8 million

$4.2 million

Data source: Calculations by author.

That kind of money can be used in part to buy a fixed annuity, and to invest in dividend-paying stocks. With $300,000, for example, you might buy an annuity that pays you and your spouse around $1,235 per month (around $14,800 annually) until you have both passed away. If you park $400,000 in dividend-paying stocks with an overall average yield of 4%, you can expect $16,000 in annual income, or $1,333 monthly.

It's vital to have a plan for how you'll get to where you need to be by retirement, so spend some time coming up with one -- and then stick to it, through thick and thin. Consider consulting a financial advisor or financial planner for additional help.