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Retiring on Social Security Alone in 2024: Is It Possible?

A typical retirement planner assumes you'll need 80% of your salary after retirement to maintain your lifestyle if you claim Social Security at full retirement age.

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Retiring on Social Security Alone in 2024: A perfectly valid question is, “Can I live on Social Security alone?” If you do not anticipate having a lot of retirement savings, or if you simply want to know if you really need to save aggressively for your retirement. You may or may not think that $1,915 per month is enough for a retired worker.

If you have a substantial retirement nest egg, you’re always in better financial shape, but you can make ends meet on Social Security alone in some cases. Let’s take a look at how you can figure out what your own retirement income needs are, and why Social Security income means different things to different people.

Do you need a certain amount of retirement income?

A typical retirement planner assumes you’ll need 80% of your salary after retirement to maintain your lifestyle if you claim Social Security at full retirement age. Typically, Social Security replaces about 40% of the average worker’s pre-retirement income at full retirement age.

There is nothing wrong with the 80% rule of thumb, as it assumes that you will still need the same amount of income after retirement, but you will no longer have certain expenses (such as saving money in retirement accounts). Depending on your circumstances, your actual income need may be higher or lower.

The first thing many people do before retiring is to eliminate as many expenses as possible. You will need much less money to cover living expenses if you can pay off your mortgage and your vehicle before you retire, for example.

Social Security benefits range widely

It is entirely possible to receive a lot more Social Security benefits than the average retired worker gets. Social Security benefits are determined by two main factors — the age at which you begin collecting them, and your average (inflation-adjusted) earnings for the 35 most productive years of your career. You can read a detailed explanation of the Social Security benefits formula here.

Even though very few people do, if you max out your Social Security taxable earnings for at least 35 years and wait until you are 70, you will be able to receive a maximum benefit of $4,873 per month, or just under $58,500 per year. Quite a few retirees could probably live on that, I’d bet.

A spousal benefit can provide as much as half of a primary earner’s monthly benefit if one spouse does not work or earns comparably little.

Social Security income replacement examples

A variety of Social Security benefit scenarios exist, so let’s look at just a few to illustrate how it can mean very different things to different people.

First, suppose a single retiree averaged $100,000 inflation-adjusted salary throughout their career, and decides to retire and claim benefits at age 64, well before the full retirement age of 67 for Social Security.

The current benefit formula for 2024 would yield a monthly benefit of $3,134. The retiree would receive $2,507 per month, or $30,087 a year, if he or she claimed it three years before full retirement age. It’s about 30% of what they earned before retiring, which isn’t enough.

For example, consider a married couple with an average inflation-adjusted income of $75,000 per year. One spouse was a stay-at-home parent and did not work enough to qualify for Social Security. When both spouses reach the age of 67, they begin collecting benefits.

The primary earner’s income in this case would produce a retirement benefit of $2,681, and they will receive every bit of it since they waited until full retirement age.

Nevertheless, their spouse would also qualify for a benefit based on their work record, and if they wait until they reach full retirement age, they would receive half as much as the primary earner, or about $1,340 per month.

As a couple, this couple would receive $4,021 in Social Security income, or $48,252. While it wouldn’t be ideal, it could certainly be a workable situation.

It is important to realize that a Social Security check might not be enough for some retirees depending on the amount of income they receive from Social Security and how much income they need to cover their expenses.

Also Read: Work Credits for SSDI: Calculating Your Eligibility for Social Security Disability Insurance

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