If you're like most Americans, Social Security is going to make up a big part of your income in retirement. But, just how much of your income can realistically come from your Social Security benefits? Unfortunately, it's less than you think.
Social Security is not designed to be your sole source of support during retirement -- it's designed to be just one of several sources of income, along with savings and pension benefits. Unfortunately, studies show most baby boomers think Social Security will do more for them than it's designed to do.
Most baby boomers expect too much of Social Security
According to the NHP Foundation, 62% of baby boomers think Social Security will provide more than half of their income during retirement. Here's the problem with that: Social Security benefits replace only around 40% of income -- and this percentage is lower for higher earners.
Living off of 40% of income is just not possible for most seniors, and relying on Social Security benefits to provide more than half your household earnings is likely to leave you struggling. Just consider average benefits for retirees in 2018, which are just $1,404 per month, or $16,848 annually.