Millions of folks in the US count on Social Security to help them through their golden years. Although it’s a lifeline for many, leaning on it too much might not be the best bet for a comfy retirement.
Let’s look at three big reasons why it’s not enough to just rely on Social Security checks!
1) Insufficient Income Replacement
Social Security is set up to cover roughly 40 percent of what you made before you retired, assuming you had an average income. However, retirees who’ve stopped working need between 70 to 80 percent of their old pay to keep enjoying life like they’re used to. There’s a big difference, a real chasm, between what Social Security provides and what people typically need to live comfortably.
As a result, many retirees end up with a lot less money to spend than they’d like, and they might have to make some serious lifestyle changes to get by. It’s like trying to live on three-quarters of what you’re accustomed to – not exactly easy street.
2) Vulnerability to Unforeseen Expenses
Contrary to what many people think, the cost of living doesn’t always go down a lot when you retire. You might spend less on things like traveling to work and paying off your house, but taking care of your health tends to get more expensive.
According to a study by the National Institute on Retirement Security, only about 1 in 14 retirees have all their income bases covered with pensions, savings, and Social Security.
Retirement can be full of surprises, and not all of them are fun, like sudden health problems or bills for fixing your house. If you’re just counting on Social Security to pay for everything, you might find that it’s just enough to get by each month without any extra for those surprise expenses. For instance, if you get sick and need to go to the hospital, the bills could be much higher than what you get from Social Security.
Planning for emergencies is important, right? It’s like having an umbrella on a sunny day, just in case. The pros say you should try to build up some extra cash while working or think about working part-time once you’re retired. That’s because if you don’t have other ways to make money, you might have a hard time dealing with surprise expenses when you’re older and not working anymore.
— Seniors League (@Seniors_League) October 11, 2024
3) Erosion of Buying Power Due to Inflation
Now, let’s talk about Social Security benefits. They do get a little boost every year to help with the cost of living, called COLA. But here’s the catch: a report from the Senior Citizens League revealed that since 2010, benefits have purchased 20% less goods than they used to. That’s like your favorite ice cream rising in price every year, yet your allowance remains the same.
Things can be difficult when all of the things you require cost more, particularly vital things such as food and doctor’s visits. If you’re only counting on Social Security, you may discover your money doesn’t stretch as far as you’d prefer.
401(k) Advisors using TRAK have doubled and tripled their business, found unmanaged assets and increased deferrals. With TRAK, you’re in the driver’s seat, bringing retirement education directly to participants and motivating them to take action. Learn more about how TRAK can… pic.twitter.com/lZbxIMqxnA
— RetireReady Solutions (@RetireReadySol) March 21, 2025
Therefore, although Social Security is a huge assistance when you are no longer working, it’s not something you should rely on entirely. It would be best to save as much as possible while you are still working or explore other income sources, such as IRAs or 401(k)s. No matter how small, savings can amount to much in the long run.
Others may believe they can survive solely on Social Security when they retire, but it’s really not a good idea. It may not be enough to cover all you need, particularly if you have unexpected bills or things become more costly. And your savings will not keep pace with the cost of living if you do not have other funds.
So, it makes sense to have a plan that does not solely depend on Social Security. Then, you can enjoy your golden years without stressing about money.
