For many retirees, Social Security is a major piece of the income puzzle. In fact, it’s the primary source of guaranteed lifetime income for a large number of retired people. Your Social Security benefit may provide a lifetime safety net to help you cover retirement’s most challenging expenses.
It’s important, though, to have other income sources outside of Social Security. Too many retirees make the mistake of relying primarily on their Social Security benefit. More than 60 percent of retirees rely on Social Security for over half their income. Social Security provides more than 90 percent of income for a third of those individuals.1
Although Social Security is a valuable retirement resource, it likely won’t provide enough income to fund your lifestyle. For many workers, Social Security replaces only a third to half of their preretirement earnings. Depending on your plans for retirement, you may need a substantial amount of income to supplement your Social Security benefit.
Have you put off saving for retirement? You’re not the only one. According to a recent study from the Economic Policy Institute, the average family between the ages of 44 and 49 has only $81,437 saved for retirement. That number is $124,831 for those between ages 50 and 55 and $163,577 between ages 56 and 61.1 While those numbers might represent a good start, it’s fair to say they’re not sufficient to fund a long retirement.
The good news is it’s never too late to get started. You may have to make some adjustments to your plans and vision, but with some discipline and focus, you may still be able to fund an enjoyable retirement.
Below are four tips to help you take fast action and overcome your retirement savings gap. If you haven’t implemented these steps or started your planning, now may be the time to do so. The longer you wait, the more challenging your retirement might be.