Approximately 40% of older Americans depend solely on Social Security benefits for their retirement, which is insufficient to maintain a reasonable standard of living. The program typically replaces only about 40% of pre-retirement income, leaving a significant shortfall. If individuals cannot supplement their Social Security with savings or part-time work, they may face difficult spending cuts. The potential for future benefit cuts adds further concern about financial stability in retirement, necessitating planning and assistance from financial advisors for realistic budgeting and income strategies.
‘If you earn an average income, you can expect Social Security to replace about 40% of your pre-retirement wages based on the level of benefits being paid today.’
‘Retiring on Social Security alone won't get you anywhere close to your required income in retirement; you may want to delay retirement to build savings.’
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