Social Security Replaces 40% of Pay, Leaving Retirees Short as Inflation Erodes Benefits
Updated
Updated · The Motley Fool · Oct 12
Social Security Replaces 40% of Pay, Leaving Retirees Short as Inflation Erodes Benefits
3 articles · Updated · The Motley Fool · Oct 12
Summary
Average earners may get only about 40% of pre-retirement income from Social Security, far below the 70% to 80% many retirees need to cover bills.
That gap could widen if the program’s funding shortfall leads to benefit cuts, a risk tied to a shrinking labor force and the need for major congressional reforms.
Benefits also may not preserve buying power: The Senior Citizens League says Social Security has lost 13.7% of its purchasing power since 2016 because COLAs have lagged inflation.
The upshot is that Social Security can be a core retirement income source, but relying on it alone leaves retirees exposed to lower income, policy risk and rising living costs.