I am wondering why so many places recommend saving such large amounts of money, $1 million or more, for retirement. If social security pays $40k per year, and Medicare exists, what is that $1 million being used for?
It’s easy to look at Social Security and think it’ll be enough—$40,000 a year sounds like a decent sum. But that $40k isn’t what most people get. It’s what high earners receive if they wait until age 67 to start drawing benefits. Most people get less—sometimes much less—because they earned less during their working years or started claiming earlier. And even then, Medicare premiums get deducted straight from your check, reducing your benefit before it even hits your account.
What does this mean? It means relying solely on Social Security sets you up for a life of survival, not comfort.
Here’s the reality: most people want to live a lifestyle in retirement that’s at least somewhat close to the one they enjoyed while working—especially in their 60s and 70s, when they’re still active and healthy. They’ll want to take trips, remodel their home, help their grandkids with college, or just go out to dinner without stressing over the bill. That all costs money. Social Security alone doesn’t make those things possible. It doesn’t even come close.
Even for lifetime high earners, $40,000 a year is a serious downgrade. It’s enough to cover the basics if you live frugally, but not much else. What happens when your roof needs repairs or your car breaks down? What happens when you face an unexpected medical bill or need long-term care? The hard truth is that unexpected expenses become far more difficult to manage when you can’t just “pick up more hours” or find another job to cover the gap. When you’re older, you have what you have. And that’s it.
Now, there are people who live solely on Social Security and government assistance, and they get by. But I’ve never heard any of them say they’re happy with what they have. Most describe it as a life of limitation. They can’t afford much, so they sit at home, watching the years pass, unable to do the things they once dreamed about. Retirement becomes less about living and more about existing.
So you have to ask yourself: do you want to retire and have fun, or do you just want to exist?
That’s why you save. Not to be rich or to live extravagantly, but to give yourself choices. A pension, savings, investments—these are what allow you to retire with dignity, with freedom, with the ability to enjoy life instead of scraping by.
Social Security is a safety net, not a strategy. It was never meant to replace your lifestyle—it was designed to keep you from falling into poverty. If you want more than that, if you want a retirement that feels like a reward for decades of work instead of a punishment for lack of preparation, savings aren’t optional.
Because the goal of retirement shouldn’t be to “get by.” It should be to live. And living takes more than $40k a year.