According to a recent Senior Citizens League survey, roughly 39% of retirees
rely on Social Security for their entire monthly income. That’s a staggering 22
million Americans who have no other retirement accounts, at least according to
the survey’s reporting.
The numbers are a bit more nuanced than what has been reported, but it’s still
good to see where you stand financially as you head into retirement. Having a
solid retirement
plan for your income and expenses is one of the best ways to reduce stress
as you transition out of full-time work.
Read on to learn why so many older Americans rely solely on Social Security in
retirement, and understand how you compare to the average, as well as what steps
you can take to improve your retirement accounts.
Why retirees rely on Social Security as the main source of income
There are a number of reasons why over 22 million retirees have to rely on their
Social Security to cover their expenses, and they’re all things that could have
been preventable with some planning.
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Inadequate savings
Opening an individual retirement account (IRA) is one of those overlooked steps
that comes back to bite you in the end. If you haven’t been diligent with your
savings and investments, you’ll be left with very little by the time you retire.
The numbers back this up. According to the Federal Reserve’s 2022 Survey of
Consumer Finances, almost half of American households have no dedicated
retirement savings at all. And among those who do have savings, about 58% of
workers say their retirement savings are behind where they should be, not a good
sign given how expensive retirement has become.
Lack of employer retirement plans
More and more companies have done away with pensions or 401(k) plans for
employees, and that makes a big difference. In previous generations, you’d work
for the same company for decades, and they would provide outstanding retirement
benefits. Now, many Americans are on their own when it comes to planning,
constantly changing jobs, and lacking the stability of yesteryear.
The numbers show how widespread the problem is. Only 15% of private sector
workers have access to a traditional pension today, down from 38% in the 1980s.
Access to any retirement plan is far from guaranteed, with about 56 million
private-sector workers having no employer-sponsored plan.
Without a plan at work, research shows workers are 15 times less likely to save
for retirement.
Claiming benefits earlier than suggested
The age at which you decide to take your Social Security benefits has a huge
impact on your monthly payment. The longer you wait until age 70, the more you
will have, and the number is pretty significant.
Claiming at 62, rather than waiting until your full retirement age of 67,
permanently cuts your monthly benefit by up to 30%.
On a $2,000 monthly benefit, that’s $600 less every month for the rest of your
life, or about $7,200 a year. Wait until 70, and you get the opposite effect:
delayed retirement credits add 8% per year past full retirement age, for a total
boost of 24% compared to claiming at 67. That same $2,000 monthly benefit at 67
becomes $2,480 at 70, just for waiting.
The difference between claiming at 62 versus 70 can exceed $1,000 a month for
someone with the same earnings record.
How much does Social Security really cover?
The average Social Security retirement benefit is $2,071 per month as of early
2026, according to the SSA. The program was built to replace about 40% of
pre-retirement income, not a full paycheck.
The problem is that retirement is expensive.
According to 2024 Bureau of Labor Statistics data, households headed by someone
aged 70 to 79 spend an average of $5,165 per month, or roughly $62,000 a year.
The three biggest expenses are housing at about $21,185 a year, transportation
at $10,071, and health care at $7,779.
A $2,071 monthly check amounts to about $24,852 per year. That is less than half
of what the average retiree household spends. Housing costs alone would consume
most of it.
Health care is where the gap gets harder to ignore. Medicare Part B premiums ran
$202.90 per month in 2026, before copays, prescriptions, and anything Medicare
does not cover. More than 70% of people who live past 65 will need some form of
long-term care, with the median cost of assisted living running about $6,673 a
month. That is more than triple the average Social Security check.
What you can do to avoid the same situation
The good news is that the steps to reduce reliance on Social Security are
straightforward, and it’s never too late to start. If you have a 401(k)
available through work, the contribution limit in 2026 is $24,500, and workers
aged 50 and older can add another $8,000 on top of that. If your employer does
not offer a plan, an IRA is the next best option, with a 2026 limit of $7,500
for those 50 and older.
Even modest contributions made consistently over time can build enough
supplemental income to meaningfully close the gap between a Social Security
check and what retirement actually costs. The goal does not have to be full
financial independence from Social Security. It just has to be enough that one
unexpected expense does not derail everything.
Retirement News: Almost 80% of Americans fear a retirement age increase — here’s the real reason why
Bottom line
Social Security was never meant to be a complete retirement income, only to stretch
your retirement dollars further. It was designed to replace about 40% of
what you earned before you stopped working, yet for tens of millions of
Americans, it has become their only income.
The reasons are real and, in many cases, structural: jobs without retirement
benefits, savings that never materialized, and retirements that began earlier
than planned. The urgency is not abstract. According to the 2025 Social Security
Trustees Report, the program’s trust fund is projected to be depleted by 2033,
at which point incoming payroll tax revenue would cover only 77% of scheduled
benefits, triggering an automatic 23% cut.
That means building even a modest cushion now, whether through an IRA, a 401(k),
or simply delaying when you claim, is the most direct way to avoid that outcome
and give yourself a shot at a stress-free retirement.
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Author Details
Josh Koebert
Josh Koebert has spent more than 16 years digging into the data behind how Americans earn, save, and retire. As a senior content marketer at FinanceBuzz, his work covers both ends of that challenge: the job market and real estate pressures that shape how much people can save, and the Social Security policies, 401(k) strategies, and retirement income gaps that determine what they’ll actually have when they get there.
