The dream of retiring may start early in your career, but are you taking active steps to support a comfortable retirement in the future? According to the Social Security Administration (SSA), the average social security benefit amount for retired workers as of June 2025 is $2,005 per month. Do you have more than $24,060 in expenses each year? While you may plan to spend less in retirement, how much less can you live on during your retirement years? What options do you have and what choices are you going to make now that affect your future financial wellness? 

Social Security

Social Security is a benefit that can be a part of your retirement plan. Social security benefits are available to those who qualify, typically, through social security tax contributions made by yourself or your spouse. You can earn up to 4 work credits a year, needing a minimum of 40 credits total to qualify, which is approximately ten years of paying social security taxes. The amount of the benefit depends on how many years worked and how much was earned over the span of 35 years. The average of 35 years of salary (with adjustments) is used in calculating the amount of your benefits. Create an account on the SSA website to see your eligibility and estimate your potential benefits. 

Retirement Savings Account Options

Many employers offer some type of retirement savings program(s). While some employers offer a match for a percentage of employee contributions as an incentive to save, it may still not be enough to build the savings you might depend on in retirement. In addition to employer-sponsored retirement accounts, you may benefit from opening an Individual Retirement Arrangement (IRA) that can also come with potential tax benefits. Traditional IRAs can be a way to defer taxes until later and Roth IRAs provide tax-free growth and withdrawals. Retirement plans with tax benefits typically have contribution limits that can change year to year. The contribution limits can differ based on your age and income, so compare the options to see what works best for your situation. 

Options exist to retire in the way you choose. The Department of Labor provides an online worksheet to help you calculate your retirement planning in detail, so use this resource to get a realistic picture of what retirement will look like for you financially. You can plan to step down your expenses in retirement, you can step down your income in retirement and work part-time instead of full-time, you can reduce your assets for a more minimalist lifestyle, or you can plan to spend down any savings. Relying solely on social security benefits may be challenging if you are currently living a lifestyle with more expenses than your potential benefit.

References

United States Department of Labor. (n.d.). Taking The Mystery Out Of Retirement Planning. Employee Benefits Security Administration. 

United States Internal Revenue Service. (n.d.). Individual retirement arrangements (IRAS). Arrangements. 

United States Social Security Administration. (n.d.). Monthly Statistical Snapshot, June 2025. Research, Statistics, & Policy Analysis.