Maurie Backman, The Motley Fool

Sun, Jun 8, 2025, 3:09 AM4 min read

• It's OK to factor Social Security into your retirement income plans.

• It's important to have realistic expectations about what the program will pay you.

• Being overly reliant on Social Security could cause you a lot of financial stress later in life.

• The $23,760 Social Security bonus most retirees completely overlook ›

There's a reason Social Security is such a big part of so many people's retirement planning. Those benefits could end up being a critical source of income for you later in life.

In a recent survey by the Employee Benefit Research Institute, 87% of workers today expect to rely on Social Security for income in retirement. And among current retirees, 94% identify it as a key income source.

But while it's perfectly OK to count on Social Security as a source of retirement income, you don't want to depend on those benefits too heavily. Doing so could upend your plans -- and cause you a world of financial stress.

If you work and pay into Social Security your entire career, there's a good chance you'll qualify for benefits once you retire. And while that's money you can count on to some degree (keeping in mind that Social Security cuts are still on the table), you don't want to rely on it too heavily.

So, how do you know if you're going overboard? It's simple. If you expect Social Security to constitute the bulk of your retirement income, you're potentially making a mistake. If you think Social Security will provide all your retirement income, you're making an unquestionably huge mistake.

In a best-case scenario -- meaning, if Social Security cuts don't come to be -- you can expect your monthly benefits to take the place of 40% of your wages. This assumes you earn an average paycheck and aren't a particularly high earner.

Most seniors inevitably need about 70% to 80% of their former income to live comfortably once they stop working. And while there's certainly some wiggle room with this formula on either side, for the most part, living on 40% of what you used to earn won't make for a very enjoyable existence.

Granted, if you're someone who earns $100,000 a year and routinely lives on $40,000 a year, you're the exception. (And hey, congratulations for mastering the art of living below your means.)

But it's a common thing to spend the bulk of your paycheck while you're working. If that's something you tend to do, then you can't let yourself retire on Social Security alone. And you shouldn't necessarily let those benefits constitute the majority of your retirement income, either.