Working Americans are often urged to save independently for retirement, rather than rely on Social Security alone to pay the bills when they’re older. But a troubling number of U.S. adults aren’t making decent headway in this regard.
An astounding 42% of Americans have less than $10,000 socked away for retirement. While that figure includes younger workers with a chance to catch up, it also encompasses near-retirees on the cusp of leaving the workforce. And it’s the latter group that’s really in trouble, because banking on Social Security by itself in retirement means signing up to be cash-strapped for decades.
Social Security alone won’t cut it
Though Social Security can serve as a nice supplement to existing retirement savings, it’s not equipped to sustain seniors by itself. The average beneficiary today collects $1,479 a month in benefits, or $17,748 a year. If you’re an average earner planning to retire in the near future with no savings, and no pension or other viable source of income, then you can expect a similar annual income once your career closes out.
But chances are, $17,748 a year won’t suffice in paying your bills. And if you think it will, ask yourself: “Am I spending much more than $17,748 a year now?” Because if you are, then you’ll need to…