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Senior couple doing home finances in their kitchen
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It’s a common misconception that you can live a comfortable, if modest, retirement solely on Social Security income and Medicare.

The reality is that many retirees are struggling to make ends meet. In some parts of the country, more than half of seniors can't afford their basic needs, according to a recent study from the University of Massachusetts. The problem could only get worse: seniors are expected to outnumber those under 18 in the U.S. by 2030, meaning that if nothing changes, we’ll see more older Americans unable to pay their bills within the next decade.

We spoke with three women leading the efforts to make their cities more age-friendly about how they are working to combat the affordability crisis — and what you should know to help prepare for retirement.

Social Security and Medicare are not enough to live on

Over 25% of older adults believe they can retire comfortably on Social Security alone, but this is not the case.

“It's a great support, but it is not all they need,” Laura Trejo, general manager for the city of Los Angeles Department of Aging says, speaking about Medicare and Social Security benefits.

The confusion is understandable, given that the size of your monthly benefit check will vary based on a number of factors, like how soon you begin claiming Social Security and your earnings history.

The Social Security Administration or SSA will provide you with an estimate of your future benefit if you create a profile on its website. (The agency used to mail Americans a statement every year with their projected benefits but discontinued the practice. Now, only those age 60 and over who haven't created an online account get a paper statement in the mail.) Note that none of these projections are exact — you can’t know the precise amount of your benefit until you apply for it, the SSA says.

That said, this rule of thumb can help you plan: Social Security replaces only about 40% of the average middle earner's income. Some low-wage workers will have up to 75% of their income replaced, while high earners receive around a quarter of their earlier income. The estimated average monthly payment of $1,543.

“Oftentimes I get to hear, ‘What do you mean, you need more? You already have this,’” says Trejo. She reminds people what it actually costs to live — and that people who are living off Social Security alone in many California counties are “falling behind every month,” she says.

A single adult living in Los Angeles County needs a monthly income of at least $1,552 in order to get by; that’s if their health is excellent, they own their home and have paid off their mortgage. Poor health and mortgage or rent payments can quickly bring that number up to well over $3,000, according to the elder index, a tool which shows the monthly income needed to live as an older person in cities around the U.S.

Contributing to the high cost of living in retirement? Health care, which can become more expensive in retirement than it was during your working career. Some people approaching retirement think Medicare is free, when in reality you'll pay premiums and other costs. Older Americans are responsible for 100% of their premiums under Medicare, an expense that is typically subsidized under employer-sponsored health insurance.

Medicare premiums, copays and drugs now cost a couple $300,000 in retirement, according to Fidelity. And that's excluding most long-term care costs. Medicare doesn't pay for routine care provided by nursing homes, assisted living or home health aides to help with daily tasks like bathing and eating (the program covers short, rehabilitative stays following surgery).

Beware of under-saving

With the rise in cost of living and the inadequacy of Social Security, savings are even more important than ever. If you or a loved one believe Social Security will be enough to live on in retirement, you may end up under-saving. In reality, putting a portion of your paycheck into a retirement account every month is even more important these days if you hope to achieve a comfortable retirement.

“Retirement is a pleasure when you’re financially secure,” says NYC Department for the Aging Commissioner Lorraine Cortés-Vázquez. She notes the traditional “three-legged stool” of a pension, Social Security and savings, has become rickety. “Some of the comforts of your financial security have eroded.”

To be sure, saving for retirement can be incredibly challenging; that’s one of the reasons why one in four adults hasn’t done it. But if there’s a gap between what you expect to make in retirement income, and how much you project you'll spend on necessities, it’s crucial to save even small amounts for your future. The earlier you start, the longer your money will have to grow; waiting even a year to begin saving could cost you tens of thousands of dollars in the long-run.

Experts recommend saving 10 times your income by the time you reach age 67. For more information, check out Money's detailed guide on how much you should save for retirement.

Your local department of aging may be able to help those on limited incomes

A Department for the Aging may sound like a ceremonial branch of your local government, but their workers are actually very busy serving a fast-growing population and can help with questions about getting by on a limited income in retirement.

In Cleveland, director of aging Mary McNamara says community members called their department to ask how to get face masks in the early days of the pandemic. The calls were “some of the most heart-breaking and heart-warming,” she’s gotten. McNamara says in many cases her team drove masks over and dropped them off. They also worked with senior apartment buildings to make sure that “those that were most isolated… had what they need.”

Masks are a specific pandemic example, but area agencies on aging work to connect older adults with meal deliveries, home care, information about affordable housing and other help they need to get by and age in place. You can look up your nearest agency using the federal Administration on Aging’s Eldercare Locator.

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