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April 18, 2026 • 10 minutes
Millions of retirees live on Social Security alone. The average monthly Social Security benefit as of January 2026 is $2,071, which comes to $24,852 a year. That’s not a large income, but it’s above the federal poverty line, and the 11 strategies below can help you make it go further.
Financial planners have long cited $1 million as the benchmark for a comfortable retirement. Federal Reserve SCF data tells a different story: the median retirement savings for Americans ages 55–64 is $185,000. Social Security wasn’t designed to replace full income, but it does serve as the primary income source for tens of millions of retirees.
The Social Security Administration (SSA) estimates that 97% of older adults either receive Social Security or will receive it. Of the more than 68 million Americans receiving Social Security benefits:
A married couple where both spouses receive the average Social Security benefit can bring in nearly $50,000 annually. The maximum benefit in 2026 is approximately $2,969 at age 62, $4,152 at Full Retirement Age, and $5,181 at age 70. Your specific benefit depends on your earnings history and the age you claim.
The 2026 federal poverty threshold is $15,960 for a single person and $21,640 for a two-person household, according to the U.S. Department of Health and Human Services. The average Social Security benefit of $24,852 clears both thresholds. That’s not a comfortable margin, but it does mean most recipients start above the floor.
Whether you owe federal taxes on your Social Security benefit depends on your combined income: your adjusted gross income, plus nontaxable interest, plus half of your Social Security benefit. For single filers, benefits start becoming taxable when combined income exceeds $25,000; up to 85% of benefits can be taxable above $34,000. For married couples filing jointly, those thresholds are $32,000 and $44,000. Retirees with no other income source often owe nothing in federal taxes on their benefits, but that depends on the numbers, not just the rule. State treatment varies: more than a dozen states exempt Social Security from state income tax entirely. See IRS Publication 915 for the full calculation.
The $2,071 average benefit isn’t a fixed number. Social Security includes an annual cost-of-living adjustment (COLA) tied to the Consumer Price Index for Urban Wage Earners (CPI-W). The 2026 COLA was 2.8%, following a 2.5% adjustment in 2025 and 3.2% in 2024. COLA doesn’t track healthcare costs specifically, so medical expenses can still outpace the adjustment. For most retirees on a fixed benefit, though, COLA provides meaningful partial protection against general price increases. That’s something a static pension or savings draw doesn’t offer.
Depending on your lifestyle, living off $24,852 a year might seem impossible, or entirely doable. Here’s where to start.
If you haven’t started benefits yet, waiting is the single most powerful move you can make. Claiming at Full Retirement Age (66 or 67 depending on the year you were born) gives you 100% of your earned benefit. Waiting past full retirement age, up to age 70, grows your benefit by 8% per year. Someone who waits from 66 to 70 gets 32% more per month, for life.
If you claim before full retirement age, benefits shrink based on how many months early you start. If your full retirement age is 66, the reduction at age 62 is 25%; at age 63, about 20%; at age 64, about 13.3%; and at age 65, about 6.7%, according to the SSA.
Use the Social Security Explorer in the Boldin Planner to model the timing decision. When you’re ready, here’s how to apply for your benefits.
Splitting housing costs with one or more people is one of the highest-impact budget moves available to a retiree on a fixed income. When two people share a home and household expenses, each person’s cost drops by a meaningful amount, whether you’re renting or sharing a mortgage payment. Options include renting out a room, co-buying with a friend or sibling, or shared-expense arrangements with family.
Read more about the golden age of homesharing in retirement.
The difference in cost of living between expensive metros and lower-cost states stretches a fixed income. Experts recommend spending no more than one-third of your income on housing. On $24,852 a year, that’s about $690 a month. The sale of a high-value home in an expensive area can more than fund a modest home elsewhere, with money left over.
States with lower costs of living include Indiana, Tennessee, Missouri, Arkansas, and Oklahoma. Before you move, check whether your destination state taxes Social Security benefits. Many states don’t. And moving abroad can cut expenses further.
Here are 14 tips for downsizing and a guide to how to retire abroad.
Heating and cooling represent one of the largest variable expenses in a retiree’s budget. Milder climates reduce dependence on HVAC systems year-round, and utilities can be one of the hardest costs to control when your budget doesn’t flex. This consideration pairs well with a relocation decision if you have flexibility on where to settle.
Carrying debt into retirement compresses every other budget line. Credit card interest is the most expensive form. Eliminating it before retirement frees up spending without requiring additional income. Each dollar of debt paid off is a dollar that stays in your monthly budget.
Learn about the advantages of a debt-free retirement and how to get there.
AAA estimates the average annual cost to own and operate a new vehicle at $11,577. At that figure, a car can consume nearly half of an average Social Security benefit. Alternatives worth considering:
Get more ideas for cutting transportation costs in retirement.
Living on Social Security means tradeoffs. Knowing in advance what matters most (proximity to family, travel, a particular community) helps direct limited resources toward what generates the most meaning. Write down the three things you’d spend money on first if your budget were cut by 25%. That short list becomes your guide for every spending decision that follows.
Start with your confirmed Social Security benefit, then map fixed and variable expenses against it. Most people discover at least one spending category they’d underestimated. It’s useful to get specific about:
The Boldin Planner lets you model your full financial picture and see how your budget holds up over time. A simple retirement calculator can give quick answers if you’re starting out.
Many retirees spend more than they know until they write it down. A notebook, spreadsheet, or phone app all work equally well. The habit matters more than the tool. Tracking often surfaces streaming subscriptions, duplicate insurance coverage, and recurring charges that add up over a month.
Here are 20 more ways to cut retirement costs.
Federal and state programs exist for low-income seniors covering food costs, utilities, healthcare premiums, and housing. According to the National Council on Aging, 9 million eligible older adults are not enrolled in programs that can help them. Programs include SNAP, LIHEAP, Medicare Extra Help (the Low Income Subsidy), and state-level supplements. Start your search at benefits.gov.
Explore some of the low-income options available to seniors.
Out-of-pocket healthcare costs can erode a Social Security-only budget faster than almost any other expense category. Medicare supplement plans vary in cost and coverage. Staying healthy reduces how often you need care; choosing the right supplement plan reduces what you pay when you do need it. Plans change annually, and your health needs change too. Comparing options each fall during open enrollment is worth the time.
The traditional advice isn’t feasible for a lot of Americans, but a Social Security-only retirement is something that works with the right approach. The core approach isn’t complicated: spend less than you receive, protect the income you have, and use every resource available to you. What that looks like in practice depends on your situation, your priorities, and how much flexibility you have. The Boldin Planner can help you map your specific numbers and find the combination of strategies that fits.
Relying on Social Security alone means covering all living expenses from your monthly benefit without withdrawals from savings, pensions, or other income. Many retirees do this by adjusting lifestyle, housing, and costs to fit a fixed monthly amount.
The average Social Security benefit for a single retiree is $2,071 per month ($24,852 annually) as of January 2026, which is above the federal poverty threshold of $15,960 for individuals. It’s possible, but it typically requires careful budgeting and deliberate lifestyle choices.
Delaying benefits to increase the monthly amount, downsizing or sharing housing, relocating to lower-cost areas, paying off debt before retirement, cutting transportation costs, and reducing overall spending are the strategies that move the needle most.
Waiting past full retirement age (up to age 70) increases the monthly benefit by roughly 8% per year. Someone who delays from age 66 to 70 receives 32% more per month for the rest of their life, which can mean several hundred additional dollars each month.
Federal taxes on Social Security benefits apply when your combined income exceeds $25,000 for single filers. Combined income is your AGI plus nontaxable interest plus half your Social Security benefit. Up to 50% of benefits can be taxable between $25,000 and $34,000; above $34,000, up to 85% can be taxable. For married couples filing jointly, those thresholds are $32,000 and $44,000. Retirees with no other income source often owe nothing federally. State rules vary: many states exempt Social Security entirely. See IRS Publication 915 for the full calculation methodology.
Social Security includes an annual cost-of-living adjustment (COLA) tied to the Consumer Price Index for Urban Wage Earners (CPI-W). The 2026 COLA is 2.8%, following 2.5% in 2025. COLA doesn’t always keep pace with healthcare cost increases, but it does offer partial protection against general inflation.
Federal and state programs cover food (SNAP), utility bills (LIHEAP), Medicare premiums (Extra Help/Low Income Subsidy), and housing expenses for qualifying low-income seniors. Millions of eligible seniors aren’t enrolled in programs they qualify for. Visit benefits.gov to check eligibility, or use the NCOA BenefitsCheckUp tool for a personalized search.
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