How American Retirees at Different Incomes Rely on Social Security

Many retirees report feeling reliant on Social Security.

But it’s more than just a feeling: Among beneficiaries 60 and older in the middle of a five-rung income ladder, where median household income was projected at about $90,900 in 2024, Social Security made up 38 percent of household income on average, according to the Social Security Administration’s MINT model, which uses administrative earnings and benefits records to make projections.

Those in the next-highest rung, with median household income of $152,300, leaned on Social Security for a quarter of their income, on average, while the group just below the middle relied on it for 56 percent.

Other studies have shown that roughly 42 percent of households rely on Social Security for at least half of their retirement income.

The program is more than just an inflation-adjusted insurance policy against running out of money in retirement — it also provides disability, survivor and family benefits. When so much of our financial lives rides on luck, timing and our collective human vulnerability, this social contract has persevered.

Assumptions and sources for illustrations

— Each example pairs a Social Security benefit calculated for a hypothetical worker born in 1962 who claims at 67 in 2029, with the retirement savings of real households near retirement with similar wages. The low and middle earners’ pay follows a career pattern based on actual workers’ earnings, rising with national wages; the higher earner earns at least the maximum amount subject to Social Security tax each year. Career-average earnings are stated in 2026 wage levels. Benefits are in 2026 dollars adjusted for inflation.

— The reduced check assumes the retirement trust fund is depleted in the fourth quarter of 2032, as projected in the 2026 Social Security Trustees Report, after which about 78 percent of scheduled benefits would initially be payable. It is an illustrative proportional reduction, not a benefit estimate provided by the Social Security Administration.

— Retirement savings figures are medians from the Federal Reserve’s 2022 Survey of Consumer Finances, adjusted for inflation, for comparable households headed by someone age 55 to 64 in 2022. They are not projections; balances could rise or fall with contributions, withdrawals and investment returns.

— Retirement savings include individual retirement accounts, like Roth I.R.A.s, and employer plans such as 401(k)s and 403(b)s. Income from savings assumes a 4 percent annual withdrawal. It excludes pensions, earnings, home equity and other assets like stocks, bonds, mutual funds and annuities held outside retirement accounts. All income figures are before taxes.

— All data and analysis are from Jack VanDerhei, director of retirement research at Morningstar’s Center for Retirement & Policy Studies.