New data shows Americans are relying way too much on Social Security — here’s what to do if you’re part of this group

Christy Bieber

Wed, September 23, 2026 at 5:20 PM GMT+3 8 min read

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Social Security is an important income source for retirees. For many, it's arguably too important.

Recent data from the Center for Retirement Research at Boston College (CRR) suggests that Social Security accounts for around 30% of all income (1) received by Americans aged 65 and over.

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That makes it the largest single source of income for older Americans.

These numbers may not seem so bad on the surface, given that the Social Security Administration (SSA) itself states that benefits will replace around 40% of annual pre-retirement earnings (2) on average. However, a closer look at the numbers shows that while some retirees rely very little on Social Security, others count on their benefits too much.

According to the CRR data, for example, Social Security accounts for only 12% of household income in the highest-earning households. But among the lowest-earning households, it accounts for 83%, and among the second-lowest-earning group, it accounts for 64%.

This could be a problem for many retirees in lower-earning households, since Social Security is meant to be part of a three-legged stool, working alongside a pension and savings to support retirees after the paychecks stop coming in.

What's more, considering that the average monthly benefit was around $2,086 in July 2026 (3), relying mostly or solely on Social Security would put a beneficiary dangerously close to the federal poverty level of $15,960 annually in 2026 (4).

Things could also get a lot worse in the future, as Social Security's trust fund is estimated to run out as early as 2032 (5) — which would necessitate a 22% automatic cut to benefits without congressional action.

If Congress follows the lead of lawmakers who reformed Social Security in 1983 (6), a deal to prevent these cuts could result in a change in the full retirement age or a slowdown in cost-of-living adjustments (COLAs). It's worth noting, however, that both options would arguably have a similar effect as benefit cuts, since either you'd have to wait longer before claiming full benefits or COLAs wouldn't be as effective at keeping pace with inflation.

That last change could be especially painful, given that another problem with overreliance on Social Security is that the COLA formula is already flawed. It's supposed to ensure Social Security benefits don't lose buying power as prices rise over time, but it likely underestimates the inflation retirees actually experience.

At the moment, COLA calculations are based on a formula (7) that uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), but that's a demographic that tends to have different spending habits than retirees.

The result is that retirees have lost around 20% of their buying power (8) since 2010, according to an analysis by The Senior Citizens League.

Put together, all of this means that if you're a retiree who depends on Social Security to cover 83% of your income, or even half or more of your income, you could be in serious financial trouble.

It also means that if you're still employed and want retirement security in your later years, it might be time to start thinking about how you're going to put together supplementary savings so that Social Security won't be the centerpiece of your retirement plan.

The good news is that there are plenty of ways of doing that. Here are a few.

Start with a cash cushion

The appeal of investing while you're still working is simple: You won't have to rely so much on Social Security once you're retired — if you do it right.

Starting out with a cash cushion can make that job much easier, since it gives you access to your money when you need it rather than having to sell investments at a bad time.

A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.

A Wealthfront Cash Account currently offers a base rate APY of 3.55% through program banks. With a new client boost & direct deposit incentive, referred clients can earn up to a 4.55% APY.

That's 10 times the national deposit savings rate, according to the FDIC's August report.

With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8 million FDIC Insurance eligibility through program banks.

Invest for retirement

While a high-yield account offers excellent returns on safe, liquid investments, you might also want to put some money into the stock market. Exposure to equities makes it possible to benefit from compounding, which can help grow your retirement nest egg faster.

But building that habit and knowing where to invest can be difficult for some investors, especially when they're starting out.

If you're not sure where to begin your investing journey, there are ways of automating the process through a platform like Acorns, which automatically invests your spare change so you don't have to.

Here's how it works: All you have to do is link your cards, and Acorns rounds up every purchase to the nearest dollar, investing the difference into a diversified portfolio of ETFs managed by experts at leading investment firms like Vanguard and BlackRock.

For example, if you buy a donut for $3.25, Acorns will round up the purchase to $4 and invest the change in a smart investment portfolio. So a $3.25 purchase automatically becomes a 75-cent investment in your future.

Diversify your portfolio

Whether retirement is decades away or months away, a diversified portfolio helps you minimize risk by giving you exposure to different assets. That way, a single downturn in the markets won't sink your retirement before it even starts.

A classic approach to diversifying your portfolio is to invest in different asset classes, mixing traditional stocks and bonds with alternative assets, such as real estate or commodities.

In particular, precious metals like gold have long been used by investors as a hedge against inflation or sudden market fluctuations. Since gold prices tend to behave differently from stocks and bonds, they can act as a cushion during periods of market stress.

For investors looking to add gold to their retirement portfolio, one way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold. This makes it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainty.

To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.

Get some professional help

Investing for retirement is complicated. So is trying to make your budget work if you've already retired and are struggling to live on Social Security.

No matter your goals or phase of life, working with a financial professional can help you make a comprehensive financial plan that works for you. A financial advisor can help crunch the numbers and build a plan that works.

But choosing a financial advisor can be a lifelong decision, one that can make or break your retirement.

That's where Advisor.com can come in. The platform takes on the challenge of reviewing advisor backgrounds, regulatory history and client ratios to fully vet advisors and connect you with a qualified expert near you, for free.

Your expert will also be a fiduciary, meaning they'll be legally required to act in your best interests.

Plus, Advisor.com lets you set up a free initial consultation with your match to see if they're the right fit for you.

Once you've got the right financial advisor in your corner, you can plan for how you want to save and spend for the rest of your life, giving you a better chance to have the secure retirement you deserve.

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Article Sources

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Center for Retirement Research at Boston College (); Social Security Administration (), (), (), (), (); Healthcare.gov (); Seniors League ()

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.