‘It’s hard to get by’ for the 21% of retirees living solely on Social Security
As Americans become increasingly concerned about Social Security’s solvency, they might be underestimating how much they’ll rely on it someday.
Nearly 60% of current retirees listed Social Security as a major source of income, but just 34% of non-retirees think they’ll depend on it, a 2023 Gallup poll found. Nearly half (48%) of non-retirees think a 401(k) or IRA will be a major source of income, but only 27% of current retirees say the same.
Carla Jenkins, a 79-year-old from South Central Ohio, is among the 21% of retirees who, according to the Federal Reserve, rely on Social Security as their sole source of income.
Jenkins taught part-time aerobics classes at the YWCA for 35 years but stopped after a shoulder injury. She took another job as a school cafeteria substitute, and her husband was a self-employed barber. Neither of their jobs provided a pension or 401(k).
Now, the couple lives month-to-month on a single payment of $1,918, which Jenkins budgets down to the penny. Her expenses include rent for a low-income senior apartment and expensive supplemental health insurance plans. Jenkins hesitates to cancel the policies because they cover costly medical visits, but the premiums make her feel “insurance poor.”
The cost of medical care services increased by 3.3% over the past year, and hospital services, specifically, are up by nearly 7%, per the July 2024 Bureau of Labor Statistics Consumer Price Index (CPI).
Jenkins also pays $100 monthly for car insurance. Rising costs forced the couple to give up their second vehicle. Auto insurance is typically cheaper for seniors, but Ohio premiums increased by 22% in the first six months of 2024, according to Insurify data. Full-coverage costs increased by 15% nationally, pushing the U.S. average annual premium to $2,329.
The couple spends $1,366 per month (or 71% of their Social Security income) on essentials before buying groceries — an expense that’s risen by 25% over the past five years, according to the CPI. They allow themselves a minor luxury — the lowest-tier AT&T television subscription — but any unexpected expense puts small comforts on the chopping block.
Jenkins’ Monthly Expenses ▲▼ | |
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| Rent | $630 |
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| Subsidized prescription insurance | $6 |
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| Two supplemental health insurance plans | $630 |
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| Car insurance | $100 |
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| Television subscription | $55 |
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Jenkins, who doesn’t have dental insurance, recently used CareCredit to pay for a partial bridge. She paid her remaining balance of $201.99 when she noticed incidental charges, like for paper billing, were adding up — but the payment cut into her limited budget, so she had to defer a chiropractor appointment. She also put off buying a $12 skin-calming cream.
These daily calculations are an exhausting reality for the 10.9% of retirees who, according to U.S. Census Bureau data, live in poverty.
The SSA increased payments by 8.7% in 2022 — the largest cost-of-living adjustment (COLA) in 42 years.
Jenkins says these increases have made little difference to her financial situation. “When they raise your Social Security, it doesn’t really matter, because that’s also when your rent, and health insurance, and electricity go up.”
The price of necessities has risen 36% faster than other goods and services over the past 60 years, according to the Brookings Institution. The public policy organization’s findings imply that purchasing power for low-income families has eroded significantly faster than standard price indexes, which include non-essential goods and services, suggest.[4]
“It’s hard for us to get by. Everything has gone up,” said Jenkins. “I have to pay attention to everything. I just have to be careful.”
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