I read a statistic from the US Government Accountability Office that says that about 50% of those age 65 or older, who are retired, rely mainly on Social Security benefits to survive.
Social Security is only designed to replace about 40% of our pre-retirement income(for average wage earners). Go HERE to read this. It is an actual quote from the Social Security Adminstration. (You can also access a Retirement Estimator from that page to see what your Social Security Benefits would look like using current information.)
Social Security is only a part of the proverbial 3-legged stool of retirement.
Pensions(or Defined Benefits Plan or 401Ks)are another part, and savings and investments are the last part of that 3 sided retirement income instrument.
Even if you have yet to put anything away into a retirement account it is never too late to start, no matter your age. The younger you are when you start saving the better, but even into your 60's there is time to put away something so that you aren't living in a cardboard box or raiding dumpster for dinner when you get old.
The average Social Security check last year was $1,340 a month or $16,080 a year.
But that amount is before Medicare benefit payments are deducted(which you are enrolled in at age 65). At the very least Medicare Part B premiums are $104.90 a month and Part C and/or D plans add to that cost(depending on the plan). So the average check is now down to $1,235.10 and probably lower due to paying for supplemental Part C/D plans.
Could you live on $1,235.10 a month/$14,821.20 a year?
Even living in the paid for house I do, once I deduct the taxes, sewage and garbage fees, if I only had this average Social Security check coming in I'd be down to having $10,002.72 to live off of per year.
The car costs, utilities, water and phone costs would take another $6,868.71 out and leave $3,134.00 of that check to cover all food and toiletry costs for the year. Plus if we needed dental or vision care(which aren't included in Medicare)or a surprise car repair/replacement that would also have to come out of that $3K leftover for food/toiletries. Seeing as I spent over $4K last year on food/toiletries, and I keep a very tight food budget compared to the average American consumer, we'd be over budget and in the red and having to put expenses on credit cards(which we wouldn't be able to pay off ever).
Forget about traveling, eating out, entertainment that wasn't free or giving our children gifts or donating to charity. It just wouldn't fit into this budget.
Thankfully for us, we won't have to live on that average Social Security benefits check alone, as we have saved for many years for our retirement.
Please no matter your age start saving something for retirement now. I beg you!
Even if you think you'll work until you die so you don't think you have to save. Life never works out the way you want it to/think it will. Working until you drop dead is a great plan unless of course you get sick and can't work. And at some point in this journey called life we will all get sick and it might incapacitate you well before you plan on not working and force you to stop earning an income. You could be disabled for many years before you leave this Earth and then what happens when you try to survive on a Social Security and/or Disability check that just isn't enough?
Anything you can put away for your tomorrow is a bonus. Do you really "need" that coffee beverage before work or that third cocktail at Happy Hour? Do you need to buy yet another sweater or go out to lunch instead of brown bagging it to work?
Take that $2, $4, $8 or $20 instead and start tucking it away into a savings account.
Score a savings at the grocery store? Why not take that amount you "saved" and actually put it into the bank and once you have enough roll that account into an investment instrument?
Be good to yourself by looking out for your tomorrows.
Start saving for your "tomorrow you".
One day your "tomorrow you" will thank you.