Here's How Much of Your Pre-Retirement Income Social Security Is Supposed to Cover
Key Points
Social Security was only intended to replace about 40% of pre-retirement income for average earners.
Low earners might get more than this, while high earners will probably get less.
Be prepared to cover any remaining costs with personal savings or other sources of retirement income.
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It would be great if Social Security covered all of your retirement expenses, but sadly, that's not the case -- and it's not a mistake. Social Security was never supposed to be your only source of retirement income. It was initially part of a "three-legged stool" that included personal savings and a pension.
As pensions have become less common, workers have had to increasingly rely on personal savings. How much you need to save is a largely individual question, but understanding how far your Social Security benefits are supposed to go can help you figure that out.
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How much of your income is Social Security supposed to cover?
Social Security is supposed to cover about 40% of pre-retirement income for average earners, though the Social Security Administration doesn't explicitly define what average earnings are. We do know that high earners' Social Security checks will likely replace less than 40% of their pre-retirement income, while low earners' checks might replace more than 40%.
But 40% serves as a good starting point if you're trying to estimate how much you'll need to save on your own. If you expect you'll only need about 80% of your pre-retirement income in retirement, then you'd only need to save about half of that on your own and Social Security should cover the rest.
Don't be afraid to save more if you're able to, though. No one knows what the future holds for Social Security, so it's possible it could face benefit cuts down the road. However, personal savings are always yours to keep, so the more you have, the more comfortable your retirement will be.
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