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Ask Stacy: How can I live on Social Security?

A reader just retired and is worried that her retirement income won't be enough. She should be.

By MSN Money Partner Sep 2, 2014 11:43AM

This post comes from Stacy Johnson at partner site Money Talks News. 


Money Talks News on MSN MoneyAs members of my generation, the baby boomers, start entering retirement in droves, more and more of us may ask a question similar to this week's reader question:

I just started collecting Social Security retirement. If I'm having so much trouble living on my allotted amount now, at age 65, what's going to happen later when I have real medical expenses and prices keep skyrocketing? -- Patricia

Social Security isn't the problem

Social Security was never intended to be the American worker's sole retirement plan. Rather, it was designed to keep Americans affected by disability, death of a breadwinner, or old age from starving. Here's how the father of Social Security, President Franklin Roosevelt, described it in a 1938 radio address:

The (Social Security) Act does not offer anyone, either individually or collectively, an easy life -- nor was it ever intended so to do. None of the sums of money paid out to individuals in assistance or in insurance will spell anything approaching abundance. But they will furnish that minimum necessity to keep a foothold; and that is the kind of protection Americans want.

And Social Security still provides that. Social Security won't be enough to keep me in my house. I pay more in property taxes and insurance on my Florida home in a month than my parents paid in a year. But would Social Security keep me alive? Yes. It will keep Patricia, and you, alive as well. But depending on where and how you live, just barely.

Where did Patricia go wrong?

Retirement isn't a thief in the night; it's a marching band that gets louder every time you blow out your birthday candles. Yet too often we treat it like Christmas, a date we know is going to arrive, yet somehow are always unprepared for. When you're going to reach retirement age isn't a mystery.

Social Security Card (© Comstock)Nor is the money you're going to receive from Social Security when you get there. You can get a rough estimate or a detailed one with your personal information any time you'd like from

So Patricia shouldn't be wondering at age 65 how she's going to make it on Social Security. She knew, or should have known, this was coming.

But that's the short answer. The longer answer is more complicated. Divorce, job loss, kids who need help, parents who need help, not making enough, not saving enough, illness, failure to plan, denial, those are just a few of the infinite reasons any of us could end up like Patricia.

Confession time: In some ways I'm no different from Patricia. I recently turned 59, and I still don't know exactly what my retirement will look like. How can I? My income varies radically, and I don't know how much longer I'll work, so I can't say how much more I can put away between now and then. Other than Social Security, I'll be depending entirely on my savings for income. If interest rates are 10 percent when I retire, my savings will generate 10 times more income than if they're 1 percent.

These and other factors make it problematic to plan effectively.

The point is that if you plan on retiring on Social Security alone, expect to have inadequate income. But unless you have a fat pension in your future or have saved millions, you'll likely reach your golden years and still wonder whether you'll have enough gold.

What should Patricia do?

If you reach retirement age and find you're not going to receive adequate income from Social Security and don’t have enough savings to make up the shortfall, you've only got two choices: You can live in poverty or not fully retire. What Patricia should have done, if possible, was to maximize her Social Security with tips like these, from "13 ways to get more Social Security":

  • Work at least 35 years. Social Security benefits are calculated based on your 35 highest-earning working years. If you work fewer years, you’ll have years with zero income averaged in, which will lower your payout.
  • Ask for a raise. If you experience a jump in salary, you'll likely boost your future earning potential and may see an increase in your Social Security payments when you retire.
  • Take a second job. The same logic applies: If you earn more each year, you'll likely increase the amount you get in Social Security when you retire.
  • Wait until full retirement age to claim Social Security. You can begin collecting Social Security benefits as early as age 62, but you might not want to. Your benefit will be reduced by 25 percent for life. To get your full payment, wait until you reach full retirement age, currently 66 for anyone born between 1943 and 1954. For those born between 1955 and 1959, the age gradually rises toward 67. For those born in 1960, it's 67.
  • Better yet, wait until age 70. If you can afford to wait until age 70 to claim Social Security benefits, it'll pay off. Thanks to what the Social Security Administration calls "delayed retirement credits," benefits increase 8 percent each year you delay tapping into Social Security, until age 70. So waiting until you reach 70 means about a third more income for life. If you took benefits early and regret the move, it might not be too late to fix it. You may be able to repay all the benefits you received so far and restart them at a higher level based on your age. But this policy isn't as flexible as it used to be. For more details, check out this page on the SSA site.

Assuming Patricia can't go back to work and reverse her decision to take Social Security now, her next best option is to earn extra money in retirement. We've also covered that before, in articles like "12 weird ways retirees make money." Select suggestions from that post:

  • Tutoring. If you have a lifelong interest -- literature, politics, history -- you're going to be an expert by the age of 66. Tutoring is a chance to share your knowledge and make decent money.
  • Consulting. Have you had a career in the same industry for most of your life? Or have you worked jobs in different industries? You can make both angles work as a consultant.
  • Knitting. If you knit, you can sell your wares online at websites like Don’t know what to knit? Tell your customers you do custom knitting. Do you create your own knitting patterns? You can sell PDF copies of your originals and deliver them via email.
  • Reverse antiquing. Do you have an old hobby collection, perhaps birdhouses or lamps, or lovely old pieces of china or furniture? Get price quotes from antique shops and sell your treasures to the one that offers the most money. Get the eBay app and compare what the shops are offering with what you can get online.
  • Cleaning services. Are you a clean freak or an organization whiz? Why not start your own business? You could clean houses or help people organize their garages, attics and basements for a fee.
  • Translating and interpreting. According to the Bureau of Labor Statistics,  interpreters and translators make an average of $45,430 a year. You can find work-from-home gigs in this industry for translating documents or transcribing audio. Check a job-seeking site like, or search LinkedIn for open positions.
  • Teach your skills. You likely have teachable skills. For instance, you're an accomplished haggler if you routinely talk a salesperson into giving you a discount on items like cars and furniture. Ask your community center or library about being a guest speaker or teaching a class.

More from Money Talks News

Sep 2, 2014 1:44PM
Part of the problem is a change in expectations.  70 years ago, it was ok to live in a 1,000 sq. ft. house and have 4 kids; you thought everything is good. Or the family had one car, again everything was good; or one home phone or even a party line.  You thought of yourself as at least middleclass if not rich. This person wasn't hungry, or destitute back however, you would think that you were lacking in many different areas!  Just change your expectations earlier so that you have some options later!
Sep 2, 2014 1:40PM
Retire at 62 do the math!!!!!! they want you to retire at 70, so the government gets  it, or a nursing home !!!!
Sep 2, 2014 2:39PM
The truth of the matter is the government would just prefer the person who is getting the social security DIE as fast as possible...
SS Is and was never meant to be your sole retirement
Sep 2, 2014 2:18PM
Sep 2, 2014 2:22PM

It is all BS, some of us have had the luck of the draw in regards to life circumstances, some of us not. That was the original purpose of Social Security. For the "nots" to have something.

With all due respect, the article does specify possible unintended life consequences such as job loss, divorce, and other items that can cause non repairable damage to a potential safe and secure retirement.

But, to pontificate on the woulda', shoulda', and coulda' is totally wrong. The ship has left the dock, the water is passed under the bridge, or over the dam. Too late for any and all advice, and especially poor taste to rub someone's nose in it.

As a previous business owner, it really irks me to hear some one call SS a "redistribution of wealth" program...give me back the almost two million bucks I paid in (self employment tax has no ceiling), in one lump sum. Then you can call it a wealth redistribution program...till then stfu. 

Many idiots today forget that the initial baby boomers grew up in an financial environment where retirement was funded by company pensions (over 60% of private enterprise back in 1970), with public employment comprising another 18%, and military supporting another 5%. That left only approximately 17% to fend for themselves, most of which were the rare working spouse.

I expected to have a pension, needed only two more years to be vested(back then you needed at least ten years consistent) before my bubble burst. Forced me to start my own company...ran it until NAFTA squeezed the margins to the point of having to cancel most benefits for my employees. Sold the company, wife divorced me (she wanted to be the wife of an owner, not a wife of a lowly engineer) and with legal fees left me with less than 10% of the proceeds. Invested it, watched it go up, then watched it crash in 2001, then again in 2007-08. Still not back to the 2000 levels, but that is my fault...I was greedy. Since then have been putting 25% of my income in investments, 401k's, and any other vehicle I can use to plan for retirement. Oldest child has a stroke...and there goes over $300k...thankfully he is recovering. But, retirement took another big hit.

Social Security is the only constant.

Sep 2, 2014 1:56PM

We have two elderly relatives who should have been paying attention to what FDR said. Their only income is SS today despite having spouses who were affluent professionals.

Quite simply, you can't have both a car and home in this situation. They are roommates. We moved them to a retirement community, turned the car back into the dealership, and fund the difference of the monthly rent. One has a small part-time job. They had a lot of credit card debt to make ends meet before this move since there was never enough income to pay the mortgage, car payment, eat, or get all medical care needed.

When they complain, we turn a deaf ear. They're luckier than they will ever know.

And if you think this will never happen to you, then think again.

Sep 2, 2014 3:02PM
This was not even a conversation years ago until big business let all of the pension funding go belly up. We have been, and continue to be robbed by the big money in this country, which by the way, has moved overseas to avoid taxes.
Sep 2, 2014 1:38PM

It is unfortunate to read a story about someone who did not pay attention. I am approaching retirement and look back on many years of living very conservatively, spending extra years in school to get a better paying job, working a second job or jobs in order to save.

Saving is not easy and for many it is impossible. It takes a good deal of will power to not party it all away. But the upside is to invest with a reputable broker and enjoy the benefits.

Social Security gives me a base income and it is supplemented significantly by my investment income. Possible an article for those 30 years younger outlining these and other steps would be more helpful.


Sep 2, 2014 3:19PM
Retire at 70!  who invented that nonsense?  Put our congressman on that plan.  95% of us are going to be to crippled or in too much pain to be working past 62.  This garbage needs to change - we are the most powerful country in the world and have bailed out so many 3rd world places - So this darned planet owes working people of the US several favors.  Triple social security   Or  exempt people on social security from paying property taxes & license plate fees.  There better be some significant changes and fast or we all will be out in the ditch with no clothes on.
Sep 2, 2014 2:07PM
Mom pay's into SS for 38yrs. pass away at 56, Dad pays into SS for 50 yrs. collects for 3 .  Kids to old and not in school to collect, but we did receive death benefit of $250.00 for each of them. 
Patty is the "YOU CAN'T TELL ME SHlT" faction of Americans, for those of us who are able to add and subtract, just save what you can and stay employed!
Sep 2, 2014 2:50PM
Social Security was meant for a Suppliment!
Sep 2, 2014 3:00PM
there are many places in this world that one can retire on social security alone, however, the U.S. is not one of them.  it would be worth your time to look at Ecuador and some other areas that you actually can live comfortable on 1000 a month.   You may want to look at Cotacachi Ec  good luck!  Cost to live in the U.S.  is getting out of control!!
Sep 2, 2014 5:39PM
You made a mistake right in the beginning of this article by claiming that Social Security was designed to pay for the disabled and orphaned.  It was not.  It was designed as a retirement system, and that design was self-sustaining.  Now, every Tim, Dick, and Harry that doesn't want to work anymore gets an attorney and gets on disability and joins the ranks of millions and millions of Americans living well on disability and supplementing even that income with whatever other sources they can scrape together.  That, along with the burden of 20 odd years of widows and orphans has strapped Social Security to the point of bankruptcy.  There aren't cost of living raises as there was intended to be; the adminstration now relies on COLA calculations which leaves out food and energy (gas and heat) in their calculations and simply pretends there is no cost of living increase.  All I can say to that is that everybody knows there is cost of living increases and food and gas and heating oil are the major contributors.  To deby cost of living increases and simply pretending they don't exist/leaving them out of calculations is ridiculous.  What can the American pe4ople do about this now that the Supreme Court has allowed our politicians to be bought and paid for by big corporations, to have been allowed to move the Social Security fund into the general funds and spend it on decades of unjustified war.  Just what can we do about it?  It turns out that the very people who have paid into the system all of their lives are now being told that it wasn't meant to sustain them.  whether they have paid into the system or not.  Although President Roosevelt may have sold the program to Americans saying it wasn't intended to help people live well, but simple live, it wasn't intended to pay every person the government wished to pay either.  I'm sick of being told that the fund is bankrupt and then having the statement be fed to us that 20 millions illegals are going to be put on the program after not paying a dime in.  First pay what was promised to the working people who paid into the system for 40, 50, and 60 years and do it in the spirit that the program was funded.  It isn't about how much you put in, but how long you put it in and how the interest WOULD HAVE compounded to build up that investment over a lifetime.  If there is any extra left, split it up among those that never contributed and leave those that cheated and never paid taxes for their lifetime wondering how they will make ends meet.  How can out government expect honor and respect when they do not honor those honest and hardworking Americans that keep everything going?  They are paying more out to scammers and lazy people than the people that follow the rules. 
Sep 2, 2014 2:51PM

Lack of planning on her (and others) part for retirement does not government entitlement make. SS was never meant to be the sole support in retirement and she knew as did others that they needed to plan for it but like most of those who did not, they  believe that just because they exist, the government should take care of all their needs.

Unless she and others lived in a cave cut off from the world, there is not way that they did not know that they needed more than just SS to live on after retirement.

Sep 2, 2014 1:04PM
A general lack of responsibility.  Thanks Stacy for the breath of fresh air.
Sep 2, 2014 2:14PM
simple , you cant.. well at least for those under 50  as there wont be anything left.. however  being smart and saving now will help..   anyone remember when ss started  it was not for identification??? now you need it just to get a library card.. amazing how the government changes the rules without the people saying they should
Sep 2, 2014 5:59PM
I'm 75. I live on SS. I do have some funds from the sale of my house. I now live in a condo on a bay. Just be prudent.  Try to stay healthy. I walk on the beach everyday.  No, you won't be able to go crazy with spending, but I have money for food and shelter. If you can pick up odd jobs. Babysit. Clean apts., walk dogs - hey - write a book.  So far I am living a blessed life. It could change, that could happen to anybody. I guess what I am saying is - don't be afraid of retirement,  All the money gurus tell you that you have to have a million bucks or more to retire. Baloney.  It all depends on how you want to live.  I'm doing ok, thanks.
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