Social Security Retirement Benefits Aren’t Enough to Sustain You
Social Security retirement benefits make no claim of providing you with a lavish lifestyle. The average monthly benefit for all retired workers in 2017 will be $1,360, according to the Social Security Administration. Although it might look possible to squeak by on that amount, real life has a way of being more expensive than you expect.
If your monthly check is $1,360, your annual income will be $16,320 per year. Such an income is above the federal poverty level for a single person, but it's still not much. To survive on that income, you'll need to find low rent and set yourself a strict grocery budget — and that's before considering utilities, transportation and healthcare costs. Carefully think through the various expenses you consider necessities, and try to slot them into your retirement budget.
Once you've budgeted for necessities, list out possible emergency situations you might encounter: a dead car battery, a dog with a foxtail in its ear, or spilled coffee on your computer keyboard. The bare-bones retirement check just won't spread that far.
Even the Social Security Administration counsels people not to try to retire on their benefit checks alone. "Social Security replaces about 40 percent of an average wage earner's income after retiring, and most financial advisors say retirees will need 70 percent or more of pre-retirement earnings to live comfortably," SSA said on its website. You'll do far better if you supplement Social Security benefits with pensions, savings and investments.
Related: 5 Social Security Changes to Watch for in 2017