Think Social Security Will Cover Retirement? Think Again.
Many Americans mistakenly believe Social Security will be enough to fund their retirement – but reality paints a different picture.
Consider the most recent cost of living adjustment.
The 2025 Social Security COLA increase is just 2.5%.¹
This minimal increase means “retired workers’ Social Security checks will grow by around $48 a month, going from an average of $1,920 to $1,968.”²
We don’t feel $50 extra is enough to cover the high cost of retirement. Do you?
If you want a comfortable retirement, you may need more than Social Security. Keep reading to learn why and what you can do to secure your financial future.
#1 Social Security Is Not Meant to Live On
Social Security was never meant to fully fund an individual’s retirement.
It was designed to supplement retirement income.
According to the Social Security Administration’s Understand the Benefits, “Social Security was never meant to be the only source of income for people when they retire. Social Security replaces a percentage of a worker’s pre-retirement income based on your lifetime earnings. The amount of your average earnings that Social Security retirement benefits replace depends on your earnings and when you choose to start benefits. […] Most financial advisers say you will need about 70 to 80% of pre-retirement income to live comfortably in retirement, including your Social Security benefits, investments, and personal savings.”³
The problem is that many Americans are expecting their monthly Social Security paychecks to cover much more.
As of 2025, the average retired worker receives a monthly benefit check ranging from $1,920 to $1,968. For couples both receiving Social Security benefits, it comes to approximately $3,089.⁴
However, the cost of retirement will most likely continue to rise, especially considering inflation and medical costs.
Experts have long suggested that the cost of retirement is 80% of your pre-retirement income.
This means if you and your spouse make $120,000 in annual income, you should plan to bring in $96,000 annual income or $8,000 a month.
$8,000 a month is significantly more than the just over $3,000 monthly Social Security payment.
What is life going to look like during retirement if you don’t find a way to fund the additional money you need?
#2 The Reality of Living on Social Security Alone
Even with all the information I shared above, 40% of older Americans rely solely on Social Security for retirement income.⁵
This means these individuals are most likely struggling to cover everyday costs.
The Senior Citizens League (TSCL) found “70 percent [of Americans] said they worry that persistently high inflation prices will cause them to raise their spending and risk depleting their retirement savings and other assets.”⁶
Additionally, TSCL reports, “Our research shows that 67 percent of seniors depend on Social Security for more than half their income and that 62 percent worry their retirement income won’t even cover essentials like groceries and medical bills.”⁷
Retirement should be the time in your life when you get to enjoy your life’s rewards – not a time to stress about paying for groceries or doctors’ visits.
But “Nearly half (48%) [of retirees] worry about living too frugally and not enjoying retirement as much as they should.”⁸
#3 Social Security Is in Trouble
Unfortunately, it’s not just that Social Security isn’t enough to fully fund a retirement.
There is a real possibility the program could end or significantly decrease before you retire.
According to CNBC, “The trust fund reserves used to pay beneficiaries are projected to become insolvent in 2035, a year later than previously projected. […] Social Security will still exist after 2035, according to the report. But without congressional action, retirees will only receive 83% of their full benefits.”⁹
Our country has known this is coming, but we still don’t have an answer.
According to the National Institute on Retirement Security, “Despite the popularity of Social Security, federal policymakers have yet to craft a long-term Social Security funding fix to address the impending depletion of the trust fund. In the coming decade, the funding challenges will force the nation into a debate and decisions about the future of Social Security.”¹⁰
#4 How to Save More for Retirement
For those already participating in a 401(k), now may be the time to work hard to get your retirement savings to a place where you can responsibly and comfortably retire.
Use the following tips to help get your savings in a healthier place beyond Social Security.
- Max out retirement contributions. Make it a point to contribute all you are allowed to contribute. If you are age 50 or older, you can take advantage of catch-up contributions, which allow you to contribute more than the 2025 limit of $23,500. For those ages 50 and older, the 401(k) catch-up contribution is $7,500, for a total of $31,000.
Note: Individuals aged 60 to 63 may contribute an additional $11,250. Check out 2025’s Super Catch-Up 401(k) Contribution - Get the employer match. Many employers match a percentage of employee contributions to their 401(k), up to a certain portion of the total salary. And some match employee contributions up to a certain dollar amount. This is like free money! Contribute enough to take advantage of this free money. Get the most out of your company match.
- Rebalance your account. We believe one of the best ways to save money in your 401(k) is to regularly rebalance your account. Unmanaged allocations may experience larger losses because of down markets. In contrast, they may miss out on growth opportunities during good markets.
If you are unsure how to properly rebalance your account or don’t know where to start, we’re here to help. 401(k) Maneuver exists to help employees grow and protect their 401(k) accounts. Our done-for-you, virtual service allows you to keep your 401(k) right where it is while we review and rebalance your account based on your risk tolerance and current market conditions.
Click here to see how we manage your 401(k) for you.
- Consider Delaying Social Security Benefits. For some people, it may be financially wiser to wait to retire. The age you stop working affects how much you earn from Social Security. Plus, the longer you work, the longer your 401(k) has to grow.
Get Help. If you are worried you may be counting on Social Security more than you should, seek help from a financial advisor. An advisor can help you determine a retirement strategy for your 401(k) and other savings vehicles so you aren’t solely reliant on Social Security when it comes time to retire.
Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) Strategy Session with one of our advisors.
SOURCES:
- https://faq.ssa.gov/en-us/Topic/article/KA-01951
- https://www.newsweek.com/social-security-cola-2025-increase-sparks-backlash-1967146
- https://www.ssa.gov/pubs/EN-05-10024.pdf
- https://www.ssa.gov/news/press/factsheets/colafacts2025.pdf
- https://www.nirsonline.org/2020/01/new-report-40-of-older-americans-rely-solely-on-social-security-for-retirement-income/
- https://seniorsleague.org/2025-cola/
- https://www.allianzlife.com/about/newsroom/2024-Press-Releases/Americans-Lack-Plans-for-Retirement-Income
- https://www.cnbc.com/select/will-social-security-run-out-heres-what-you-need-to-know/
- https://www.nirsonline.org/reports/socialsecurity2024/
