Thinking You Can Retire on Social Security Alone is Another Myth - The Motley Fool
Social Security was created to help keep seniors out of poverty once they could no longer work. However, it was never intended to be your sole source of retirement income. With rising inflation, having additional retirement income sources is more important than ever. Some people must rely on Social Security alone because they lack the means to save from other sources. For others, it was a misconception—they thought Social Security would be enough.
The average Social Security benefit is about $2,076.71 per month, or $25,000 a year. Benefits are based on your highest 35 years of earnings, adjusted for inflation through age 59. Higher skills and earnings mean higher benefits.
Your Social Security benefits do not even come close to covering what you earned when you worked. High-income earners, while they will receive a substantially higher Social Security benefit, only get around 25% of their average monthly earnings replaced. Low-income earners, on the other hand, will receive between 40% and 60% of their average monthly earnings covered by Social Security. Regardless of which category you fall in, you will have to make substantial changes to your lifestyle if you are living solely on your Social Security benefits.
Maurie Backman has written an article about Social Security never being meant to be your only retirement income. You can read the full article here …
You may be eligible to start Social Security at 62, but if you were born in 1960 or later, your full retirement age (FRA) is 67. Starting at 62, your benefit is permanently reduced by 30%. If you can delay benefits while still working, you’ll get a higher amount: 100% at age 67 and 124% at 70. Your benefit grows 76% between ages 62 and 70. If you’re healthy and expect a long life, this is worth considering, especially if you will rely heavily on your Social Security benefits.
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