Social Security is becoming the primary retirement plan for many Americans. But it's rarely enough money.

Social Security is becoming the primary retirement plan for many Americans. But it's rarely enough money.

Kerry Hannon · Senior Columnist

Tue, August 4, 2026 at 7:14 PM GMT+3 4 min read

Social Security pays, on average, about $25,000 a year in retirement benefits — hardly enough to live on comfortably.

But according to a new survey, more than 4 in 10 workers aged 55 and older expect Social Security to be their primary source of retirement income.

"What surprised us wasn't just the number of employees expecting to rely primarily on Social Security during retirement," said Steve Jans, wealth management national practice leader at NFP, a benefits firm that commissioned the survey. "It was what this expectation suggests: Many workers may not have a clear understanding of how Social Security fits into a retirement plan — an education gap as much as a savings gap."

More than 7 in 10 workers surveyed report being off track in their retirement savings goals, and 46% say they are "deprioritizing" retirement savings or are unable to save at all.

"Employees are not necessarily giving up on retirement, but instead they're prioritizing today's financial pressures over tomorrow's goals," said Jans. "Inflation, rising living costs like auto payments, and competing financial demands are reasons retirement savings are being postponed rather than abandoned."

In other words, workers are hunkered down, shelling out their paychecks for essential expenses like housing and healthcare, rather than setting aside a portion in a long-term retirement savings account.

That present reality is understandable; however, relying on Social Security as your fallback raises serious concerns for your future financial health.

Expectations vs. reality

The size of your Social Security check depends on your work history, lifetime earnings, retirement age, and the year you start claiming benefits.

Following a 2.8% cost-of-living adjustment (COLA) from 2025, the average Social Security retirement benefit is approximately $2,083 per month as of May 2026, equivalent to just under $25,000 per year, according to Social Security Administration data.

For women, those checks are often leaner, roughly one-quarter less than the average man's due in part to lower pay over their working years, time out of the workforce for caregiving, and more part-time work.

And for many retirees, rising out-of-pocket medical costs now eat up a good chunk of those monthly checks. Even including Medicare coverage and not accounting for long-term care, retirees are overwhelmed by premiums, copays, and a myriad of uncovered medical services.

"Retirees get this because they're writing the checks now, but those nearing retirement need to realize that this is coming up," economist Matthew Rutledge previously told Yahoo Finance. "It's a rude awakening for people once they get to retirement."

On average, a 65-year-old who leaves the workforce this year may need $185,500 in savings to cover out-of-pocket healthcare expenses throughout retirement, not including potential costs for assisted-living and long-term care arrangements,

Those daunting dollar figures aside, many seniors do count on Social Security for the bulk of their income

Today, for about half of seniors, monthly Social Security benefits provide at least 50% of their income, and for about 1 in 4 seniors, they provide at least 90% of income. For more than a quarter, it's their only source of income.

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One way to give yourself a bigger cushion: Delay, delay, delay. Most Americans don't wait or can't wait until age 70 to start collecting benefits, but doing so puts more money in your pocket. More than a quarter of Social Security beneficiaries begin claiming benefits at age 62, as soon as they're eligible, even though their monthly benefit may be reduced by as much as 30% from what it would have been at their full retirement age. For anyone born in 1960 or later, the full retirement age is 67.

If you delay benefits from your full retirement age until age 70, you earn delayed retirement credits. Those come to roughly an 8% increase for each year until you hit 70, when the credits stop accruing.

Confusion about how Social Security works and the basics of a 401(k) is damaging, Jans said. "People struggle because they feel overwhelmed and don't understand fundamental retirement concepts."

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist and the author of 14 books, including "Retirement Bites: A Gen X Guide to Securing Your Financial Future," "In Control at 50+: How to Succeed in the New World of Work," and "Never Too Old to Get Rich." Follow her on Bluesky.

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