Many retirees will need a lot more, and they should have a good idea where it will come from.
Most retirees need Social Security to help pay for their retirement. But just how much assistance does this benefits program actually offer to America’s seniors?
A look at what the typical retiree has received from Social Security in the first half of 2024 can give you a clearer idea of just how far its retirement benefits will go.
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The Social Security payout so far in 2024 is lower than you might think
Retirees received an average monthly Social Security benefit of $1,907 beginning in January, meaning that for the first half of this year, typical retirees had $11,442 deposited into their bank accounts from the program. And that’s before Medicare premiums and any taxes are taken out.
Some retirees are receiving more than the average if they were higher earners over their careers or if they delayed claiming their checks beyond full retirement age — or both. In fact, the average Social Security benefit at 70 is $2,038 per month, or $12,228 for the first half of 2024.
But that average total of $11,442 over six months will not sustain someone, and it’s likely a huge surprise to anyone anticipating that they could live comfortably on what the government would provide them in retirement.
Why is the Social Security payment so low?
The harsh reality is that Social Security payments were never meant to replace the 80% to 90% of pre-retirement income you are typically projected to need for a comfortable retirement. The program’s benefits are only intended to be one of three income sources that make up the so-called “three-legged stool” of support during your senior years.
Under this model, Social Security benefits will replace 40% of pre-retirement earnings, while your other two income sources — retirement savings and a pension — are supposed to provide the rest of the money you need.
It’s crucial to keep this in mind as you consider whether you have enough investments and (ideally) a pension to retire. Try to calculate whether you have enough supplementary savings — at a safe withdrawal rate — so that if you do get only about $2,000 a month from Social Security, you’ll have plenty of extra funds to fall back on.