3 Things You Might Have to Give Up If You Retire on Social Security Alone

Years ago, it was a pretty common thing to work for the same employer for decades, collect a pension, and retire securely without separate savings. But those days are largely gone in the context of private sector work.

It’s true that many public sector workers are eligible for a pension. But if you don’t work in the public sector, you’ll generally need to save for retirement on your own or otherwise risk landing in a situation where you’re forced to live on Social Security alone.

Now you may be thinking, “Well, that seems doable.” But retiring on Social Security alone isn’t easy.

The average recipient today collects a little under $2,000 a month, which comes to less than $24,000 per year. And if that’s the only income you have access to in retirement, here are a few things you might end up having to do without.

1. A nicer home

It’s important to have a comfortable place to live in retirement. For one thing, you’re likely to spend more time at home in the absence of a job. And also, as you get older, you might face certain health and mobility challenges. It’s important to have a living space that accommodates those needs.

But if you retire on just Social Security, you may not be able to afford a comfortable home, or to stay in the home you’ve lived in for years. Even if that home is paid off by retirement, costs like property taxes, insurance, and maintenance may be too much to handle on just Social Security. So if you want more flexibility to spend money on housing, make sure to build savings.

2. Vacations and leisure

When you’re working, it’s nice to take a break from the daily grind and escape somewhere fun. But a lot of people look forward to traveling in retirement, too. And if the only money you have to live on is Social Security, you may not have many travel options.

Similarly, if your only retirement income is Social Security, you may not have much wiggle room in your budget for leisure. But it’s important to stay busy in retirement, so that’s not a good situation to be in.

3. Medication and necessary healthcare treatment

Fidelity estimates the cost of healthcare in retirement at $165,000 for a 65-year-old. But depending on your needs, your medications and care could cost even more.

If you retire on just Social Security, though, you may have to skimp on healthcare. That could mean skipping medication doses or avoiding the treatments you need because they cost money. And that’s a terrible position to be in, as it could compromise your health in the near term and the long term.

Take savings matters into your own hands

Clearly, it’s not optimal by any means to only have Social Security as income once your career ends. So don’t let that happen.

Get into the habit of contributing to an IRA or 401(k) each month, and work with a financial advisor to invest your money so it’s able to grow over time. Even if you only manage to accumulate a modest amount of savings in time for retirement, it’s far better than spending your senior years pinching pennies because you only have a Social Security check to fall back on.

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