Will retirees be able to live on average Social Security benefits in 2022? – Community News
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Will retirees be able to live on average Social Security benefits in 2022?

If you plan to retire but have no money saved, will Social Security benefits be enough to support you? This is a common question that many older Americans have to deal with, so before you leave the workforce, find out what life would be like if you tried to live off Social Security alone.

Two adults with arms around each other in a field.

Image source: Getty Images.

What would life be like with the 2022 average Social Security benefit?

In 2022, the average Social Security benefit would yield an annual income of $19,884, and that would be hard to live on.

The Massachusetts Institute of Technology (MIT) Living Wage Calculator estimates how much it would cost to meet the minimum standard of living across the country. Even in cheaper states like Arkansas, Indiana, Mississippi, North Dakota, Ohio, West Virginia, and Wyoming, the cost is $27,000 per year for singles without children, leaving retirees short of what a normal person would need.

While many retirees in some categories may face lower costs than their younger counterparts, such as housing if they have a paid-up home, certain essentials — including health care — are likely to be much more expensive for seniors.

So for seniors with health problems, or who haven’t paid off their homes, or who are helping grown kids make ends meet, the Social Security checks alone would probably leave them in an even bigger deficit when it comes to paying the basics than that. $19,884 quantity suggests.

If this isn’t confirmation enough about the challenges you’ll face, a quick look at the federal poverty level — $19,320 for a single person in 2022 — shows just how big the struggle would be. It means retirees relying solely on Social Security would find their income around what the federal government deems necessary to cover basic necessities.

What to do if you only have to live on social security?

Unfortunately, some seniors don’t have a choice. They have to live on social security without additional savings because they can no longer stay on the labor market and have no nest.

If this happens to you, there are a few things you can try to make ends meet:

  • Shrink your housing: If you are a homeowner, consider selling and moving to a cheaper property. If you can sell for a profit and buy a cheaper house, you can hopefully be mortgage-free — and potentially get some equity out of the house that you can invest.
  • Find out if you qualify for additional benefits: If your income and resources are low enough, you may qualify for Supplemental Security Income to provide additional money — or for benefits such as the Supplemental Nutritional Assistance Program, which can help cover food costs.
  • Retiring in a low cost of living area: While MIT’s Living Wage Calculator suggests you’ll run into problems everywhere, some places are much more expensive than others. In the most expensive states, including California and New York, a living wage is over $38,000.
  • Consider drastic ways to cut costs: This could involve living with a roommate or trying to get by without a car.

These are undoubtedly sacrifices, and future retirees can hopefully avoid them by recognizing that Social Security checks are intended to replace only about 40% of pre-retirement income and are not sufficient on their own.

Employees should, if possible, prioritize saving for the future, while current retirees should be aggressive in cutting costs as they face the unpleasant reality of surviving government benefits alone.