Inflation has decreased budgets for retired people more than ever, although Social Security does not intend to cover the entirety of anyone’s retirement income, most people will be eligible to receive a certain amount of benefits when the time comes, the question that arises is in view of the current cost of living, is Social Security enough on its own to finance even a modest lifestyle throughout retirement?, Probably not.
This is not meant to disappoint anyone, but the average monthly Social Security check that retirees receive this year 2024 is a little more than $1,900, or about $22,800 annually, that’s quite far from the $72,967 that the U.S. Census Bureau assumes the average household spent in 2022 on basic goods such as food, clothing, and house.
However, keep both numbers in perspective, that typical monthly Social Security payment is only the benefit of an average retiree, but there may be two retirees in a single home, the average household expense also excessively reflects the needs of families that are made up of three or more people, which obviously require more spending than a household of one or two retirees, it is also more likely that you will own a house outright when you are already retired, while people in their working years usually make mortgage or rent payments.
The Reality of Living With Less Than $1,900 a Month
Even so, the probability of covering all your expenses during retirement with a monthly income of no more than $1,900 is small, even if you live humbly,
the Census Bureau reports that almost half of all people living in the United States between the ages of 55 and 66 have nothing saved for their retirement, the Federal Reserve confirms that conclusion, obviously, a group of retirees is trying to make it work only with Social Security, or soon it will be.
The positive news is that even if you haven’t saved enough yet, or anything at all to retire on your own, there are some practices you can run to help fund your future better.
Catching up on Retirement Savings
Don’t panic, the chances of making a good decision when you are in a panic are low. Rather, take a break to think things through with a cool head before making the decision to bridge the gap between what you have and what you need.
There are two main categories of people in this situation: people who are already retired and have benefits and people who are not, but are already close to being so.
If you have already started collecting your Social Security retirement benefits, there is a possibility to suspend them and restart them again at a later date, which allows them to increase, however, this option has some limits, one of them is that you must have started your benefits just within the last year.
You will also have to make the refund of the money that you have already received. This means that you will not only have to get a significant lump sum of money, but you will also need another source of income until you take your benefits again, if you are worried about living only on your Social Security payments, you may not have this other income.