How Much Should You Rely on Social Security to Fund Your Retirement?

Research suggests a couple in their mid-30s earning $50,000 as a household today needs to save 11% to 13% of their income to maintain their current standard of living when they retire at age 65. The same research shows the same couple earning $100,000 would need to save up to almost 17% of their income to maintain their lifestyle in retirement.1

These numbers assume that the only source of retirement income you have is what you saved during your working years, and most people can pull from other places to fund their life after work. The most common other source? Income from Social Security. While it's highly unlikely that your Social Security benefits will be sufficient to cover all of your financial needs in retirement, it can provide a useful supplement to your savings.

Here's what you need to know about Social Security income and how it can help fund your retirement.

Q: How much money can I expect from Social Security?

A: Realistically, the answer is "not much." Social Security can provide you with a little extra money, but most people find what they receive from Social Security isn't enough to pay all their bills — and it's certainly not enough to allow for the same lifestyle you enjoyed while you worked and earned a paycheck.

The Social Security Administration's website provides a number of useful tools and calculators to help you estimate how much you could expect in retirement once you file for benefits.2 The quickest, easiest way to get an estimate is to head to their "Quick Calculator," which gives you a ballpark figure based off your age and the information you provide about how much you've earned.3 Or you can use the My Social Security portal to receive personalized estimates of your benefits based on your past earnings.

Did you know? While Social Security can help fund your retirement, it's likely your benefits won't be enough to cover all your bills.

Q: What factors determine how much Social Security I will get?

A: While the Quick Calculator gives you a fast answer, a lot more goes into determining how much Social Security income you could receive. Factors that influence the amount of benefits you can expect depend on:

When you were born.
When you file for benefits (you're eligible for full benefits when you hit full retirement age, which for most people is 67; if you file before that age, you receive reduced benefits and, if you file after, your benefit increases every year you wait until it maxes out at age 70).4
Your marital status — and even the status of past relationships (widowed or divorced) if you were previously married.5
How much you made during your 35 highest-paid working years.6

Q: What other retirement saving options are available?

A: If you estimate your benefits, you might find that Social Security doesn't provide nearly enough income to cover your costs of living — let alone allow you to achieve some of your biggest dreams, like traveling the world or finally buying that second house up at the lake.

While Social Security may provide you with some monthly income, you'll need other sources to fund your retirement in full. Those may include:

Your cash savings
Your retirement accounts, like 401(k)s and IRAs
Any investments you have outside of your retirement account, which could include stocks, bonds, non-residential real estate, or another other investment vehicle that produces income
A pension from a previous employer
Other streams of income (like a part-time job if you choose to work a few hours a week, consulting or freelancing you do because you enjoy it, or even a "second act" career if you're not quite ready to call it quits just yet and want to explore other fulfilling job opportunities)

You probably won't be able to access all these potential options — but chances are good you can leverage one or two of these strategies to help pay for the retirement you want.

It's best to plan now for how you'll supplement your Social Security check in retirement. That way, you can retire without sacrificing your lifestyle.

When you're ready to partner with an experienced financial advisor to develop comprehensive, customized solutions based on your unique financial priorities, Synovus is here to help.

Important Disclosure Information

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

Robert Powell, "How much do you need to fund retirement? More than you think," USA Today, accessed August 9, 2018. Back
Social Security Administration, "Benefits Planner: Calculators," accessed August 9, 2018. Back
Social Security Administration, "Social Security Quick Calculator," accessed August 9, 2018. Back
Social Security Administration, "When To Start Your Benefits," accessed August 10, 2018. Back
Social Security Administration, "What Every Woman Should Know," accessed August 10, 2018. Back
Kimberly Lankford, "How Much Will I Get From Social Security When I Retire?," Kiplinger, accessed August 10, 2018. Back

People are also reading

Do you have questions or ideas?

Share your thoughts about this article or suggest a topic for a new one