"The average Social Security benefit is just $2,008 as of August 2025. This is not an impressive amount of money for retirees. A monthly benefit of $2,008 would provide an annual income of $24,096, while the federal poverty level for a single person is $15,650 in 2025. The Bureau of Labor Statistics also reports a median weekly income of $1,043 per worker in the U.S., so collecting just $2,008 per month would be a major pay cut for many people after retirement."
"While it may seem like a glitch that these benefits are so low, it's not. The reality is that you should not expect to get all of your income, or even most of it, from Social Security in your senior years. Benefits are supposed to be part of a three-legged stool, including a pension and savings. The problem is, the other two legs are wobbly. Many people don't have a lot of savings, and private sector workers don't usually have pensions."
"401(k) and IRA accounts can also provide some flexibility, as you may be able to choose between traditional accounts that come with upfront tax breaks and Roth accounts that defer tax savings to retirement. And, while a 401(k) usually only lets you choose from around a dozen or so funds, an IRA allows you to invest in almost anything you want."
Average Social Security benefits near $2,008 monthly yield about $24,096 annually, which is only modestly above the 2025 federal poverty level for a single person and often far below pre-retirement median earnings. Social Security is intended as one leg of retirement income alongside pensions and personal savings, but many retirees lack adequate pensions and savings. To maintain living standards, retirees must supplement Social Security. One common method is withdrawing from retirement accounts such as 401(k)s or IRAs, which offer tax advantages, possible employer matching, and investment choices, though they require sustained contributions and large account balances to generate sufficient income.
Read at 24/7 Wall St.
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