At age 65, many retirees find themselves relying on a combination of Social Security benefits and retirement savings to make ends meet, with the average Social Security payment at $1,583 per month. While Social Security provides a safety net, it was never designed to fully replace income, and for most, it falls short of covering basic living expenses.
This leaves retirees needing to stretch limited resources, plan carefully, and often make tough financial decisions to navigate retirement comfortably. Here’s how much the average 65-year-old receives in Social Security benefits—and what the average retiree should know as a result.
How Much Does the Average Person Receive in Social Security at 65?
The average Social Security benefit for people at age 65 is $1,583 per month, according to the Social Security Administration. For men, the average is higher, at $1,756, and for women, it’s lower, at $1,426.
It’s important to note that people are not eligible for full Social Security retirement benefits at age 65. Though you can start receiving them as early as age 62, the benefits will be reduced by a small percentage each month before your full retirement age, which is 67 for people born in 1960 and later. As a result, the average monthly benefit for a retired worker is higher, at $1,976. At the exact age of 65, your benefits will be reduced to 86.7% of the full amount.
These numbers mean most retirees will need to supplement their Social Security benefits with income from their retirement savings, says Scott McClatchey, a senior wealth advisor at South Carolina-based Ballast Rock Private Wealth. “There just won’t be enough available to pay bills and live a comfortable, typical span retirement,” he adds. “It’s grim.”
Average 401(k) Balance at 65
So, how much does the average 65-year-old have in their retirement account? According to Fidelity, the average 401(k) balance for people ages 65 to 69 is $252,800. If you’re following the 4% rule for withdrawals, you’d have about $10,100 available for your first year of retirement, or roughly $800 per month.
What Does This Mean for You?
With about $2,400 to spend monthly from their 401(k) and Social Security benefits, “the average retiree is not in especially strong shape,” says Justin Pritchard, a Certified Financial Planner at Colorado-based Approach Financial. “That said, there are people who can live on that: They typically live in lower-cost areas, and as long as life doesn’t throw them any curveballs, they can meet their needs,” he adds.
For areas with a higher cost of living, however, it’s a tougher call. “These averages highlight the challenges many retirees face,” says Daniel E. Milks, a managing partner at Fiduciary Organization.
“Social Security was never meant to fully replace income in retirement; it’s designed as a safety net,” he says, adding: “Unfortunately, many retirees end up relying on it as their primary or sole income source, which can lead to financial strain.”
Milks offers some options for an average retiree facing financial difficulties. The key consideration, he says, is learning how to stretch these limited resources by taking a “hard look” at their monthly expenses, particularly housing and healthcare, which are often the largest portion of a retiree’s budget. Some retirees might consider downsizing or relocating to an area with a lower cost of living.
Alternatively, people can consider options to manage income during retirement—such as taking on a part-time job, depending on their ability to do so, and a reverse mortgage, among others.
The Bottom Line
At 65, the average Social Security benefit and a modest 401(k) savings leave many retirees in a precarious financial position. While some can make ends meet in lower-cost areas, others may face tough decisions like cutting expenses, downsizing, or finding additional income sources.
Ultimately, as Milks notes, “Planning early and often is the best way to avoid falling into this average, and for those already retired, making smart spending decisions and maximizing benefits is key.”
