The decline in pensions has left many Younger Retirees Depend on Social Security to cover their expenses. Without additional sources of income, many face a tough financial reality in their retirement years.
Younger Retirees Depend on Social Security More Than Ever
Recent research from the Employee Benefit Research Institute (EBRI) highlights a growing Younger Retirees Depend on Social Security. The 2024 Spending in Retirement Survey, which examined the financial habits of 3,600 retirees, revealed that those aged 62 and 63 receive about 67% of their income from Social Security. In contrast, retirees aged 74 and 75 rely on these benefits for only 52% of their income.
This trend suggests that younger retirees are struggling to secure alternative income sources. Bridget Bearden, a research and development strategist at EBRI, notes that reliance on Social Security appears to decline with age, indicating that younger retirees face more financial pressure earlier in their retirement.
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Why Are Younger Retirees Depend on Social Security?
The shift away from traditional pensions has significantly impacted how retirees fund their post-work years. According to federal data, the number of private-sector employees covered by defined benefit pensions fell from 42.3 million in 2008 to 30.2 million in 2022. With fewer employers offering pensions, retirees are now expected to rely on personal savings, such as 401(k) plans and IRAs, in addition to Social Security.
Financial experts warn that Social Security was never meant to fully replace a worker’s income in retirement. On average, Social Security replaces about 40% of pre-retirement earnings, which may not be enough to cover basic expenses. Furthermore, with the Social Security trust fund facing a projected shortfall by 2034, future benefits could be at risk.
Social Security Dependence by Age Group
| Age Group | % of Income from Social Security | Average Monthly Spending | |
| 62-63 | 67% | Less than $3,000 | |
| 74-75 | 52% | $3,000 or more |
Is Social Security Enough for Younger Retirees?
While Social Security provides a safety net, it is often not sufficient to cover all expenses. Financial planners recommend that workers save at least 10 times their annual salary before retirement to maintain financial stability. However, many retirees fall short of this target. According to the federal Survey of Consumer Finances, the median retirement savings for those aged 65 to 74 is around $200,000, with nearly half having no retirement savings at all.
Also Check out Social Security Taxes Under Trump: What His Plan Means for Retirees to plan early.
FAQs
Do Younger Retirees Depend on Social Security than older retirees?
Yes, studies show that younger retirees receive a higher percentage of their income from Social Security compared to older retirees, who often have additional income sources.
Why are younger retirees more dependent on Social Security?
The decline of traditional pensions and inadequate personal savings have left many younger retirees with limited financial options, making Social Security their primary source of income.
What can younger retirees do to supplement their Social Security income?
Financial experts suggest saving aggressively, delaying Social Security benefits if possible, and exploring part-time work or alternative income sources to improve financial stability.