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IRS raises 401(k) contribution limits for 2026<\/p>\n
IRS increases 401(k) and catch-up contribution limits for 2026, allowing workers to save up to $32,500 for retirement.<\/p>\n
Is it possible to live comfortably in retirement on Social Security income alone?\u00a0<\/p>\n
Yes and no.\u00a0<\/p>\n
Alden and Dena Swartz draw nearly $4,000 a month from Social Security, the government program designed to support Americans in retirement. And they are struggling.\u00a0<\/p>\n
Gail Randle and her partner, Mike DellaVolpe, collect only $2,400 a month in Social Security benefits: Not quite $30,000 a year. And they are doing all right.\u00a0<\/p>\n
\u201cWe are frugal people,\u201d said Randle, 73. \u201cAlmost everything in our house is recycled. Used, you know? Thrifted. But it looks nice. Everything works.\u201d\u00a0<\/p>\n
Social Security was never intended to fund the full cost of retirement. On average, the benefit covers about 40%<\/a> of a worker’s preretirement earnings. And that figure could drop: Social Security will face a shortfall by 2035, according to the Congressional Budget Office.<\/p>\n Most Americans think you need at least $1 million<\/a> in the bank, on top of Social Security, to live a comfortable retirement. Investment firms and news headlines reward that thinking: Plan to save 10 times your annual income<\/a> before you retire, common wisdom suggests, if you want to keep the lifestyle you have now.\u00a0\u00a0<\/p>\n But here\u2019s the problem: Most Americans don\u2019t save nearly that much. In the 65-to-74 age group, the typical family with a retirement account has about $200,000 saved, according to the federal Survey of Consumer Finances. Only about half of those households have retirement accounts at all<\/a>.\u00a0\u00a0<\/p>\n And here\u2019s the question: How are those people doing?\u00a0<\/p>\n Just fine, says Andrew Biggs<\/a>, a senior fellow at the American Enterprise Institute think tank. He penned an essay that went viral<\/a>, arguing that you can retire with a lot less than $1 million in the bank: $50,000 to $100,000 in savings should do it, he said.\u00a0\u00a0<\/p>\n As evidence, Biggs points to another federal report, the Survey of Household Economics and Decisionmaking. That survey asked retirement-age Americans, 65 to 74, how well they were managing financially. Roughly 85% said they were doing OK.\u00a0<\/p>\n After they retire, \u201cpeople spend dramatically less,\u201d Biggs said. \u201cThis sort of rat race you get when you\u2019re working, a lot of that drops off in retirement.\u201d\u00a0<\/p>\n To test that theory, USA TODAY reached out to retirees across the country who are living mostly on Social Security and asked how they were doing. We got help from the r\/retirement community<\/a> on Reddit, whose 83,000 members talk about this stuff all the time.\u00a0\u00a0<\/p>\n This account was published in late 2024. We’re reprinting it as 2025 draws to a close. Some facts and figures may have changed in the ensuing year.<\/p>\n \u2018I have worked so hard all my life\u2019\u00a0<\/p>\n Gail Randle\u2019s approach to retirement living has a lot to do with staying out of trouble.\u00a0<\/p>\n \u201cI don\u2019t drink, I don\u2019t smoke, we don\u2019t get arrested, we don\u2019t go to jail,\u201d she said. \u201cWe don\u2019t start arguments with people.\u201d\u00a0<\/p>\n Randle had a long career in the Army and Army Reserve, working as a colonel\u2019s clerk and as a general\u2019s driver. She dabbled in property management and sometimes moonlighted as a cocktail waitress. For the final 16 years of full-time work, she owned a retail store. \u201cAdult,\u201d she clarified. \u201cIt was stripper clothes.\u201d\u00a0<\/p>\n She retired in 2016 at age 65. She felt that she deserved it.\u00a0<\/p>\n \u201cI have worked so hard all my life, working two jobs, sometimes three,\u201d she said. \u201cYou throw in the Army Reserves. And it has really been a struggle.\u201d\u00a0<\/p>\n For all that work, Randle has only $2,000 in retirement savings. She has a modest annuity, about $500 a month, but it runs out in a couple of years.\u00a0<\/p>\n And so, Randle and her partner, Mike DellaVolpe, 82, survive mostly on Social Security. Their combined benefit is about $2,400 a month.\u00a0<\/p>\n The money goes farther than you might think.\u00a0\u00a0<\/p>\n In the years before retirement, Randle \u201cput some things into effect that would make my life easier,\u201d she recalled. \u201cI said, OK, we\u2019re going to need a newer car. We need to get our pool resurfaced.\u201d She recently paid off the $82,000 mortgage on her home in Clearwater, Florida.\u00a0<\/p>\n She has two grown kids who support themselves. She and her partner enjoy keeping to a budget.\u00a0<\/p>\n \u201cWe are both very frugal,\u201d she said. \u201cWe look at those menus and we say, \u2018They\u2019re crazy. We are not going to pay that. I can do better at home.\u2019\u201d\u00a0<\/p>\n In their last dinner out, Randle recalled, \u201cI had a little pizza for $11, and my Mike had an Italian beef for $11.\u201d Their bill was $23.\u00a0\u00a0<\/p>\n \u201cWe have a place we go for breakfast,\u201d she said. \u201cIt\u2019s owned by Greeks, so you know it\u2019s good, and breakfast is $6.50.\u201d\u00a0<\/p>\n \u2018I was never going to get old\u2019\u00a0<\/p>\n Living on Social Security is one thing. Living well is quite another matter, as Alden and Dena Swartz have learned.\u00a0<\/p>\n Alden Swartz had a good job at a corporation that sold packaging products, working on a team that sold the packaging machines: \u201cAnything that had to do with making a bottle of ketchup and making it shippable,\u201d he said, by way of example.\u00a0<\/p>\n In 2019, the company reorganized, \u201cand they organized me out of my position,\u201d Swartz said. He retired at 64.\u00a0<\/p>\n All seemed well. The Swartzes had well over $3,000 a month in Social Security benefits. And they lived in a veritable castle: A 4,800-square-foot, red brick Italianate masterpiece in Lafayette, Indiana, built in 1859. The couple had bought it in a down market and spent \u201ca boatload of money\u201d on renovations. Their monthly mortgage payment was $1,180.\u00a0<\/p>\n Then, life happened. The Swartzes learned of the impending birth of their first grandchild. In South Korea.\u00a0<\/p>\n Their daughter had married a South Korean man and relocated there. Not about to miss the blessed event, the Swartzes moved to South Korea in 2019, arriving in time for the birth.\u00a0\u00a0<\/p>\n Housing works differently in South Korea. The Swartzes were planning a lengthy stay, so they chose to rent an apartment. They had to place a $100,000 deposit on the rental, though the rent totaled only $900 a month. To raise the money, the Swartzes sold their dream home.\u00a0\u00a0<\/p>\n When the couple left South Korea, they got their deposit back \u2013 but it was $28,000 lighter because the dollar had strengthened against the South Korean won.\u00a0\u00a0<\/p>\n Upon their return to the United States, the Swartzes found that home prices had soared in Lafayette, and interest rates had doubled.\u00a0\u00a0<\/p>\n \u201cAnd when you combine those things,\u201d Swartz said, \u201cthere\u2019s no way we can replace what we had when we left.\u201d\u00a0<\/p>\n The couple was forced to rent. They are paying $1,800 a month now for a smaller home in a less prosperous community.\u00a0<\/p>\n \u201cI\u2019m not so worried about the downsizing as I am about the safety of the neighborhood,\u201d Swartz said.\u00a0<\/p>\n The couple sold all their furniture for the move, so they have furnished the rental with cheap buys from Facebook Marketplace. Almost everything is used.\u00a0\u00a0<\/p>\n Even so, the Swartzes\u2019 financial situation feels precarious. They draw $3,890 a month from Social Security, along with $240 a month from two small pensions. Rent and monthly utilities total at least $2,200 a month: More than half of their income.\u00a0<\/p>\n To get by, the couple had to draw on a small emergency savings fund. They both have IRAs, but they haven\u2019t touched them, \u201cbecause they\u2019re small,\u201d worth a combined $40,000, Alden Swartz said.\u00a0\u00a0<\/p>\n \u201cWe\u2019re going to have to make a decision next spring about what we\u2019re going to do, or I\u2019m going to continue to pull down our savings,\u201d he said. \u201cAnd I don\u2019t have any way of replacing that.\u201d\u00a0<\/p>\n Swartz said he may try to get a part-time job at Starbucks. He and his wife live frugally.\u00a0<\/p>\n \u201cWe don\u2019t eat out very often, which is OK because really I like our home cooking better,\u201d he said. \u201cOur travel is going to be limited to family events.\u201d The couple journeyed to Europe and South America and cruised the South Seas in years past, but \u201cthose are no longer on the agenda.\u201d\u00a0<\/p>\n Swartz grew up on a farm, driving a tractor, so those deprivations are not particularly painful.\u00a0<\/p>\n \u201cI\u2019ve had a wonderful life. I have a tremendous family,\u201d he said.\u00a0<\/p>\n He faults himself, though, for not building a larger retirement fund in his working years.\u00a0\u00a0<\/p>\n \u201cThere\u2019s nobody really to blame for our current financial change other than me,\u201d he said, \u201cbecause I was never going to get old.\u201d\u00a0<\/p>\n \u2018There\u2019s not a whole lot we need\u2019\u00a0<\/p>\n Fourteen years into their retirement, Suzanne and Susie Leedy can personally attest that it is possible to retire on Social Security.\u00a0\u00a0<\/p>\n Suzanne retired from her real estate job in 2010. Susie, a registered nurse, suffers from multiple sclerosis and has been on disability since 2008.\u00a0\u00a0<\/p>\n They had some savings, but neither partner had a retirement savings account. What they did have was a track record of work. Their combined Social Security checks total $4,500 a month.\u00a0\u00a0<\/p>\n