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Retiring on Social Security

social-securityI was reading this article over the weekend about how folks who depend on social security aren’t getting much of a cost of living increase this year and haven’t for several years. Of course, there was the requisite moaning and groaning from seniors and from advocates who always seem to be talking about how hard seniors have it and how meager one’s existence is if social security is your only income. For those people who have retired with no income other than social security, I have one word: Lucky!

Seniors Are Lucky!

Yes, you read that right. I think people who are receiving social security are lucky. In 2014, the average social security payment per month was $1294. I realize that’s not a ton of money. Hopefully you have other assets and/or income streams, but even without those, you’re still lucky.

You might not be able to live in that gated golf community or travel around the world. You probably can’t pay for your grandchildren’s college education. You might not even be able to live in many expensive areas of the country. However, there are plenty of areas in the US where you can rent a modest place, cover utilities, pay for groceries, and have a little bit left for incidentals. You won’t starve or have to live in a cardboard box. You know you will, barring some sort of Armageddon, get your social security check every month.

Who Won’t Be So Lucky

You all know I’m a bit older than the average blogger, so I might get some social security. At SSA.gov, it says that I will receive $1935 per month if I continue to make the same salary until my full benefit age of 67. Then, if you look at the fine print, it says something to the effect that social security is in a bad way and if changes don’t happen, payments will be reduced beginning in 2033. That’s only 19 years. What if I was 20 right now?

That’s right, for you kids, there probably won’t be a nice solid check every month from age 67 on. Either they will keep raising the retirement age or the percentage of benefits will be reduced. If you retire in 2053 with nothing other than social security, you might be living in that cardboard box.

Don’t Depend on the Government

The solution is so simple, yet difficult for so many. Don’t depend on the government. The government doesn’t owe you anything. Regardless of what so many people believe or feel entitled to, we’re responsible for our own selves. You can spend all the money you want on whatever you want, just don’t expect Uncle Sam to bail you out down the road if you choose not to save for retirement.

If you want to retire with assets instead of nothing, you have to be proactive now. If you stick to your plan, it doesn’t matter who the President is or whether or not Washington makes decisions.

1)Live Below Your Means

If you spend every dime you make and them some, debt will be your undoing. I don’t know how anyone who remembers the fairly recent recession can continue living paycheck to paycheck. Luckily, we didn’t have any major financial setbacks during that time, but we did see some close family members lose everything. It profoundly affected our thinking about money. I don’t know what more it takes to wake people up.

2)Diversify Your Income

I think the majority of people have one main income source, and that’s great, but you always need to be thinking. If your job ended tomorrow, what would you do? If you have no idea, start planning. Find a side hustle. Invest in real estate. Make connections. Learn new skills. Putting all the eggs in one basket might be easier, but I don’t ever want to get too secure and take my income for granted. I wouldn’t lose sleep over this, but when times are good, that’s when the wheels need to be turning. You can make your own luck if you have enough options when things go wrong.

3)Save Some of That Income

How many people were forced into an earlier than planned retirement because they lost a job during the recession and didn’t have enough savings to wait out the worst of the economy? I know lots of people who were 62 and went ahead and started social security benefits. I also know people who lost a house or cashed in their 401k plans. How would life be different today if they’d had a 6 month emergency fund?

It might seem silly to keep a chunk of money in a savings account with today’s interest rates, but if your job disappeared tomorrow,  you’d be so glad to have that cushion. It would, if nothing else, buy some time before having to go into panic mode. Most people don’t think clearly in a panic.

4)Think About Tomorrow

After paying off credit card debt, we have relaxed our spending a little. I think life is too short to deprive yourself of everything all the time, but always think about tomorrow. If I buy a new car every four years or spend $500 a month on clothes, how many years does that set back my retirement?

Right now, I really, really want a cleaning person. If I do that, that’s probably $200 a month that isn’t getting put into retirement or paying off our mortgage. I know that when our house is paid off, we’ll probably be financially independent. That’s way more important to me than hiring a housekeeper. In the moment, when I’m up to my elbows in the mop bucket, I sometimes forget that, but ultimately, long term goals are more important. I’ll do a few things I don’t like today, so I can do whatever I want tomorrow.

I do feel empathy for people who have worked 40 or 50 years and have nothing to show for it other than a monthly social security check. I think some people do get an unfair shake, but I would argue that the majority of people in this position went their whole lives without considering the four steps mentioned above. No matter how much complaining I hear about fixed incomes, at least there is a fixed income to complain about.

Do you think people who get social security are lucky? Are you planning on social security or DIY retirement?


Image:Social Security Administration


About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.


  1. I had to read that part twice about people who live off of Social Security are lucky – I get it now 🙂

    You know me – I’m a DIY when it comes to retirement planning. Even though I don’t think SS will ever fully go away, I’m not planning on receiving nearly what the SS website tells me I will. I look at that income as icing on the cake.

  2. We plan our retirement to include $0 when it comes to Social Security. Figure it’s safer that way and if we do see anything it’ll be gravy.

  3. Social Security isn’t going anywhere. Compared to other fiscal issues like Medicare, it’s an easy fix. Even the youngest readers will receive social security in my opinion.

    • i think it is a fairly easy fix if you could ever get the politicians to agree and stop spreading fear and worry to make the other party look bad.

  4. I have a family member part of that grumbling chorus. We have a debate regularly whether or not it’s really an entitlement program or not. They, of course, don’t view it that way but I guess that’s a different topic for a different day. I’m not counting on SS myself and if we get any then it’ll just be extra that we weren’t counting on.

    • We have some grumblers as well as family members who use it as a bonus because they were smart with their money. I guess it’s a matter of perspective.

    • Social Security is more like a Ponzi scheme than an entitlement program. The scheme works as long as more people pay into the system than draw from it. It worked for decades as baby boomers paid into the system to support payments for the older generation. Now that baby boomers are retiring the system is about to collapse.

      The only saving grace is that retirees tend to vote. Allowing it to collapse of its own weight will be political suicide. I will be grateful for what benefits are paid – to supplement my own savings.

      • Yes, I think we would have chaos in the streets if they let it fall apart completely. I think reforms will happen and that will mean less for you and me, but if you look at it as a supplement, it doesn’t really matter.

  5. I’m definitely not counting on social security. I have a feeling SS will only go to people who are broke around the time I finally am eligible. It will be no different than welfare or Medicaid. My only problem is I am paying this tax that is supposed to pay me back at some point but I doubt it will and that really irritates me.

  6. I try not to worry about whether I will get social security or not. I assume they will also make it means-tested somewhere along the line too, so my guess is that I won’t get anything. That’s pretty sad when you think about it.

    • I don’t think too much about it either but when I read articles about how people complain about no cost of living increase, it kind of makes me want to say shut up and be thankful you get what you get.

      • MomofTwoPreciousGirls

        My cost of living increases aren’t keeping up with REAL inflation either (you know the number that includes the things we actually HAVE to buy, like food and gas). Nothing I can really do about it either!

  7. I do think that people who get social security are lucky although I think that people think assume that it will be way more money than it is. Most of my retired clients live beyond their social security, which is because they didn’t prepare well along the way. For any client of mine below 40, I tell them that they will not have social security which is why financial health is so important for them. The earlier they start making smart choices, the better off they will be because even people on social security could have made better choices.

    • Yes, I totally agree that most people should have made better choices when they had the chance, and I feel younger generations are even worse, so it makes me wonder what will happen to people my age and younger if they stay in debt and never plan for retirement. You can work a long time, but most of us can’t work forever, even if we wanted to.

  8. I wish they’d raise the retirement age sooner rather than later. I don’t anticipate getting much from SS, but SOMETHING would be nice.

  9. I would hope that the amount I have to contribute being self-employed to SS would mean that I would see something less than 3 decades from now, but my plans for FI don’t include SS so whatever SS money I may receive would be a surplus. Seeing what one of my in-laws gets from SS is pretty sad – way under the average you stated and they are forced to work in order to make up the difference to pay for her basic expenses – that is exactly what I’m trying to avoid.

    • Yes, average is just that. I often deal with patients who need assistance with prescription medicines and they have $500 a month in SS to live on. It’s meager, but they do qualify for all kinds of other entitlements. Not a great way to live, but I still say lucky to have all those systems in place.

  10. I must beg to differ. If the government demands part of my paycheck every year that I work, year in and year out, then they do owe me something. They owe me that money back plus what I could have made on it in the stock market. They don’t owe me more than that, but they do owe me that.

    • I can understand your point, Brad, and I know most of my students (and probably your readers as well) hope to get back what they put in. It’s one of the most common frustrations many of us have with Social Security. If that were the case, though, Social Security would simply be a federally enforced savings program (at a pretty horrendous return rate, as we would all agree). But as “Social” security, I have to accept that it’s purpose, whether we agree with it or not, is to provide something for the the most vulnerable to survive when they are no longer able to work.

      So, instead of a forced savings plan where we get 100% back of what we put in, plus our share of opportunity cost, it’s a federally enforced insurance that taxes WORKING citizens in order to provide for ALL citizens. Mathematically, a large percentage of us will HAVE to pay in more than we’ll ever get out. And like most insurances, I hate paying the premium because getting a benefit back means something even worse has likely happened (like, in the case of social security, no longer earning an living).

      We can debate the merits of Social Security, whether it is rife with freeloaders and fraudsters, and whether it has been a/the major step toward a welfare state, but I can’t look at it as a saving plan. All I have to do is look at my expected retirement “benefit” using the Social Security site’s calculator to figure that one out.

      By the way, Brad, I love your contributions to the How to Save Money blog.

    • I should have made my context more clear. I agree with you to some extend, but I feel eventually, benefits will be cut and it will just become sort of a tax. What I was hoping to get across is that people need to make their own way in retirement and not depend on or expect the government to bail them out if they don’t save.

  11. Great post. Social Security needs to be changed because people are living a lot longer then when it was first implemented and the number of retirees are growing quicker than the number of people paying into the system. There literally is now way to keep the system the way it is because of a little thing called math so expect some changes at some point if Congress can agree.

    The system will always be there but we won’t be getting as big of a check as we would have if we retired 20 years ago. But that’s ok, it just allows you to plan to save some more on your own.

    • As much as social security needs reform, Medicare worries me even more. End of life care is outrageously expensive, and the government needs to do a better job at making Medicare recipients declare their wishes before there is a need.

  12. I’m definitely not counting on social security being there once I reach retirement age. It would just be considered a bonus and nothing else.

  13. I passionately believe that this nation as a whole is LUCKY there is Social Security for all who qualify to receive it in their old age. The funding issue of Social Security can be easily secured but there is a concerted effort by those who would benefit by getting people to accept they won’t get it. Here is the deal, instead of accepting this well organized and funded ruse that Social Security is doomed with no solution and younger generations won’t get it, instead start demanding that you do get it. NOTHING moves in this country politically without huge amounts of money or fear of the voter. Just giving-in to the notion of no Social Security means THEY win. It only requires minor tweaks to get it where it needs to be but there is no political will to go against the big money, not when entire younger generations accept this. It was never meant to be all of someone’s retirement funding and it is still absolutely best to be prepared using all of the steps you detailed in this post but you should demand and expect that you will receive your Social Security. Demand it with your voice backed up by your votes. I am not some far left Lib, I just believe that this is a worthy retirement benefit we were all forced to pay into, not an entitlement. I am planning on getting some Social Security and demanding that I do.

    • You are right that noting gets done if we don’t educate ourselves, have opinions, and vote. I’m just afraid that all the choices in candidates are about the same.

  14. I don’t really expect to see any Social Security when I retire and that’s why I’m taking charge of my retirement by myself. The way I see it is, if I get SSI then that would be a bonus!

    • There is such a difference between having it as a bonus vs means to live on. My Mom uses her social security check as a bonus and thinks it’s awesome.

  15. I think one of the greatest misperceptions about SS is that people assume they will get so much more and that is meant to be a livable amount (and not basic living but ideal, retirement living) and it’s not today. It may have been at one time, but people are living longer and spending more years in retirement than they did even a handful of years ago. We generally plan for retirement with the expectation of receiving no SS benefits to be safe. Although I suspect it may still exist, but may look very different than it does today and have a much lower benefit. Our aging population will have great voting power and politicians will likely be too scared to outright eliminate the program but realistically have to make significant changes too. I am an optimist but encourage my clients to plan to fund their own retirement. Any assistance they get from the government or a pension plan is gravy. It’s always a huge risk to rely too heavily one something you can’t control or can be taken away from you.

    • I agree that many seniors expect SS to be enough to live comfortably on. It was never meant as that. It’s a shame that there really aren’t that many pension jobs anymore because as a counttry, we certainly haven’t learned to DIY for retirement.

  16. Half of our retired neighbors are not making it with social security. They thought they had planned on having enough and depended on a large part of their retirement to be SS. The problem is they run out of money and are making it through the rest of the month on credit cards. Then their next SS check comes and they pay off the credit card bills. They will never be able to leave this cycle because there is no other income stream at their age. This will be an ongoing issue going forward since SS will likely not be around for everyone at its current level. All the more important to save as much as you can heading in to retirement and really have a good plan in place.

    • I think credit card debt with seniors is a huge problem that will only get worse as younger people reach retirement age. My grandparents never had a credit card in their lives, but my parent’s generation sure do.

  17. I’m not depending on it, but whatever I can get will certainly be nice. At the rate I’m going lately I’ll need it. 🙂

  18. I’m not factoring it into the equation at all. If it’s still available, that will be great, but if not, I’ll be fine. My parents are somewhat lucky in that hey live off of my dad’s social security and my mom’s pension, and they’re making do. That’s only because they moved to a lower cost of living place, where they knew they could afford to retire. My mom is still looking for part-time work, though.

    • My inlaws did that as well. They don’t necessarily like where they live now, but they have a place to live, food, and a few modest things. Not probably what they envisioned, but I’d still say lucky.

  19. We’re not counting on SS and will consider it gravy if we do get it. That being said, it is frustrating paying into something we may never see. If the government can’t handle my money then let me choose how to invest it.

  20. We’re not counting on SS and will consider it gravy if we do get it. That being said, it is frustrating paying into something we may never see. If the government can’t handle my money then let me choose how to invest it.

    • I agree. I want nothing from the government other than things I already pay taxes for like police, highways, schools, etc. I’d much rather manage my own money and decline social security.

  21. I think social security will be around when I retire, but I don’t count it in my projections. The senior lobby is _way_ too strong to let anything happen to social security… and fixing it’s current problems will be relatively easy.

    As for current recipients being lucky? I dunno, I kind of think of them as getting what they paid for. Maybe that’s luck, but they certainly deserve it. They’ve paid into the system, they should get something out of it!

    • I mean lucky in the sense that there would be nothing without those guaranteed payments. I have relatives who live solely on SS, and it’s not awesome, but they have their basic needs met at least.

  22. I don’t know about lucky, but those who get social security definitely were born at the right time. I am a big advocate of social security reform and wish they would pass a law where you can opt-out of it (I realize this brings up issues, but not enough room to debate them all in comments). I am planning on getting $0 from social security.

    • I would love to opt out of social security, but I also do not put it into my retirement planning. I believe I will get something, but it will just be a bonus not necessary for surviving. I think lots of people would opt out and then, unfortunately, spend that money on the here and now.

  23. I love counting on Social Security….maybe for a new car. Anything more than that? Absolutely not!

  24. “I think some people do get an unfair shake, but I would argue that the majority of people in this position went their whole lives without considering the four steps mentioned above.” AMEN! We can’t just fly through life willy nilly about our money, and then sit there in stunned silence and inaction when we don’t have enough to live on/retire on. Those our age and younger (I’m 47) should seriously NOT expect a dime from SSI, and start planning accordingly, NOW.

    • I’m not sure where we’ve gotten off track to expect the government to support us and keep increasing the amount of assistance as time goes on.

  25. I personally don’t think SSI will even be around by the time my husband retires. I’m a stay at home mom, and wont receive anything extra beyond what my husband recieves for SSI and honestly that is a scary thought. However, it is the reason we are working so hard at getting out of debt. So that we can start saving more for retirement.

  26. I’m going to the SS office this month to sign up for my enormous $450 benefit. I did little work that qualified under SS since I worked under a government pension system most of my working years. When I left that job and went to one covered by SS, I did a direct transfer of my government funds to a self-directed IRA which makes up most of my retirement. The SS just covers my last 10 years of work which is why if is so small. My husband receives a pension and will not receive SS.

  27. I suspended my contributions very early to DIY my retirement plan, as I think my generation won’t see much money anyway. Yes seniors are lucky although they have worked for it and deserve it too. It is great to know you’ll get a check until you die.

  28. MomofTwoPreciousGirls

    “The government doesn’t owe you anything.”

    The one line I disagree with in this article. They owe me the damn money they are forcing me to pay against my will!!!

    I truly hate the entire concept of social security…if it never existed I could have a whole lot more of the income that I work my butt off for, at a job I cannot stand. I have no thought in my head that there will be any social security COLLECTING for me. I just wish it meant I could keep my own money to invest for myself. I wouldn’t even mind if the government was forcing me to put that in a 401k or IRA. I hate that they take my money to give to people that did not bother saving any of their earnings to care for themselves. Or how about the “death benefit” of 200 some odd dollars they pay to families at death…that piddly amount does nothing on an individual level but cost billions every year. And spousal and child payments…ever hear of insurance, people.


    • I guess I should have worded it “The government doesn’t owe you a cushy retirement.” They should pay you back what you put in plus interest, whether they will or not remains to be seen, I guess. I really wish we had the option of opting out of SS. I would much rather plan my own investing.

  29. Actually, my mom relies on her social security pension from my father. My father died at the very young age and my mom only got a small amount every month. For me, I think it’s better to DIY your retirement.

  30. It is really worth it having social security pension. My grandma who worked for a government agency is enjoying her pension so much. It really is more than what she expected or what normal pensioners receive. No complaints made!

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