Retirees with these three sources of income are far less likely to face poverty and economic hardship. A new report also finds that a large portion (40 percent) of older Americans rely only on Social Security income in retirement.
From the SIPP, NIRS declares that 40.2 percent of retirees receive all of their income from Social Security.
Is Living on Social Security Alone Possible? You can potentially use Social Security alone to support yourself, but you would need to plan in advance to ensure that your monthly check will cover your necessary expenses at minimum, including your food and housing.
Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.
The maximum benefit depends on the age you retire. For example, if you retire at full retirement age in 2024, your maximum benefit would be $3,822. However, if you retire at age 62 in 2024, your maximum benefit would be $2,710. If you retire at age 70 in 2024, your maximum benefit would be $4,873.
You can wait until as late as age 70 — something many Americans do, because the longer you wait, the higher your monthly payment. For those who are collecting Social Security at age 65, the average payment in 2022 was about $2,484 a month, according to the Social Security Administration.
In 2023, an average of almost 67 million Americans per month will receive a Social Security benefit, totaling about $1.4 trillion in benefits paid during the year. Social Security is the major source of income for most people over age 65. *This information is from research released in 2021 using 2015 data.
And almost no income aside from a monthly Social Security check. Roughly one in seven Social Security recipients ages 65 and older depend on their benefits for nearly all their income, according to an AARP analysis.
With that in mind, it may seem like a difficult if not impossible task to retire on $2,500 per month. However, while in many cities, especially large metropolitan areas, that much income would make it hard to scrape by, in others it's enough for a secure and satisfying lifestyle.
It's hard to retire on only Social Security, but at least you might get to keep your benefits in full. Some seniors are forced to retire on Social Security alone in the absence of having savings. And it's fair to assume that people in that boat are likely to struggle financially, to some degree.
Living on Social Security alone is not only possible, but many retirees already accomplish that very feat every year. While the lifestyle associated with Social Security income isn't exactly luxurious, it doesn't have to equal rice and beans for the rest of your life, either.
Generally speaking, the average Social Security check was $1,710.78 in November 2023, according to the Social Security Administration. However, this number doesn't specifically address retirees who earned a middle income during their time in the workforce.
We find that about half of the population aged 65 or older live in households that receive at least 50 percent of their family income from Social Security benefits and about 25 percent of aged households rely on Social Security benefits for at least 90 percent of their family income.
Under normal conditions, the Treasury sends Social Security payments one month in arrears. That means the check you receive in June covers your benefits for the month of May. If the debt ceiling isn't raised, the Social Security payments due to be sent to beneficiaries in June would most likely still go out.
Based on data from the SSA's Office of the Actuary, nearly 566,000 aged 62 retired-worker beneficiaries were receiving $1,274.87 as of Dec. 2022. Meanwhile, the average Social Security check for the 2.27 million retired workers at age 66 is $1,719.85.
The average American spends $4,345 per month in retirement, according to the Bureau of Labor Statistics. That's $52,141 per year.
Most of us seem to know that the average American lives between 70 and 80 years: 73.5 years for men, and 79.3 for women, to be exact. Fewer of us understand that life expectancy rises with age. An American man who turns 70 today will live to 85, on average. A woman of 70 will live to 87.
Average Retirement Spending
According to the Bureau of Labor Statistics (BLS), the average income of someone 65 and older in 2021 was $55,335, and the average expenses were $52,141, or $4,345 per month.
Seniors who reside in an assisted living facility and run out of funds will be evicted. Elderly individuals who are unable to turn to family for financial support and have no money can become a ward of the state. This may be the case if the senior develops a health emergency and is no longer able to live alone.
If you have more than $1 million saved in retirement accounts, you are in the top 3% of retirees. According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.
While you may have heard at some point that Social Security is no longer taxable after 70 or some other age, this isn't the case. In reality, Social Security is taxed at any age if your income exceeds a certain level.
In the proposals presented to the Commission, the use of retirement bonds--and annuities based on bond accumulations- would also replace the entire benefit structure of Social Security for the future.
Filing for Social Security at age 62 could also end up making sense financially if you're worried you won't end up living a very long life. While you'll shrink your benefits on a monthly basis, by getting to collect that money sooner, you might end up with a higher amount of lifetime benefits.