Why You Shouldn’t Depend Completely on Social Security for Retirement


Most people look towards retirement with great anticipation. Being able to pay bills, and do the things you love all while not having to work full time or at all. Just sit back, relax and collect a paycheck. Unfortunately, that’s hardly the scenario.

Even if you’ve saved your entire life, it still might not be enough. The reason? The insufficiency of Social Security.

The Current State of Social Security

Presently, the average senior citizen receives between $1,400 and $1,500 a month in Social Security benefits. Although the maximum monthly allowance is around $2,860, a very small percentage actually receive this amount.

What’s even more unfortunate is that the amount you are expecting may not be what you actually receive. There are a few key variables that can influence your monthly Social Security check that may make you think twice about depending on it too heavily during retirement.

Working for Less Than 35 Years Can Significantly Lower Your Monthly Payout

Social Security benefits are calculated based on the top 35 years of your professional working career. For every year that you do not work or have no reported wages, you’ll be issued a nice round $0 for that year.

Whether you took time off to care for a family member, or just needed a break, your monthly earnings will be affected. A $0 amount will significantly influence the equation that projects your monthly income.

Neglecting to Look at Your Yearly Earning Statements

The Social Security Administration (SSA) generates annual earnings reports for workers. These reports give a detailed summary of taxable wages as well as a glimpse of the benefits you will receive upon retirement.

It is very important that you look these over carefully in case there are any glaring mistakes or unexpected changes. It’s not uncommon for a miscalculation to show up on this report that could undoubtedly affect your monthly income during retirement. You can never be too cautious.

Taking Your Social Security Benefits Much Sooner Than Necessary

Seniors are allowed to start collecting their Social Security benefits as early as 62 years old. However, electing to claim benefits before the full retirement age of 67 years old will diminish them significantly.

Each year that you collect your Social Security ahead of the full retirement age, you will receive a reduction in benefits that are permanent unless you go through a grueling process to reverse the effects.

It cannot be stressed enough how important it is to NOT rely solely on your Social Security benefits during retirement. The variables involved present too much of a risk. It’s best to have as much certainty as possible when deciding to retire and Social Security alone cannot provide this.