What will Social Security look like when you retire?

Social Security is a government program that offers financial benefits to eligible retirees, people with disabilities, or survivors of deceased workers, and these benefits are administered by the Social Security Administration (SSA). Since 1937, millions of Americans have been receiving Social Security retirement benefits. As of 2025, over 56.4 million retirees get a check from the SSA each month, and 97% of older adults are eligible to receive benefits.

However, a significant portion of the population hasn’t been able to supplement expected Social Security benefits with their own retirement savings. In fact, about 27% of people age 59 and older haven’t saved anything for retirement, and Social Security benefits keep four in 10 adults age 65 and older above the poverty line.

What’s more, Social Security may face some challenges in the coming years that could affect how you’re thinking about and planning for retirement, no matter how close or how far away you are. Here are some things to consider about what Social Security may look like in your retirement.

Many may think that Social Security is intended to replace a person’s entire income in retirement, but in reality, it isn’t. Instead, Social Security is meant to supplement other retirement savings. To illustrate, the Social Security income replacement rate is about 40% for retirees.

And while life expectancy has also increased—ultimately a good thing—a longer retirement means retirees may need more money. Finally—and this is important—the number of people nearing or already claiming Social Security is at a historic high. In 2024, more Americans turned age 65 than at any other point in history, an inflection some researchers refer to as “Peak 65.” In other words, if there are more people working than drawing benefits, Social Security can maintain its current level. But if the equation flips—as it’s about to do because of Peak 65—there may not be enough people actively employed to fund the current level of Social Security benefits.

Many people often refer to Social Security as going bankrupt, mainly because sometime around 2032, the current level of benefits and the age at which Social Security pays them will no longer be feasible, given the forecasted ratio of workers to eligible recipients.5 At this point, barring any changes in how the program is set up, benefit amounts would have to change. This could look like a change in the level provided or the age at which you’re eligible to receive them, both of which would be decided by the U.S. Congress.

Tip: Create an online Social Security account. You can view your work history and contributions, as well as your expected payout.

Planning ahead can help prepare for any changes made to Social Security benefit levels or retirement age in the future. And regardless of how much you plan to receive in Social Security benefits down the line, your main retirement goal right now may be to save as much as you can for as long as you can.

If you’re near retirement (i.e., age 55 and over):

• Think about the age you plan to claim Social Security benefits. This is because benefits increase significantly if you delay taking them up to age 70. If possible, Principal® recommends waiting until your full retirement age (i.e., age 67 if born in 1960 or later) to begin taking benefits. If your situation allows, consider waiting until age 70 to receive the maximum benefit. There’s no increase in benefits after age 70, so there’s no reason to delay claiming Social Security past that age.
• Take advantage of catch-up contributions, or consider working a bit longer than initially planned, if you’re able to. More people are phasing into retirement, meaning they’ll work part-time, for example, to delay relying fully on retirement income sources.

If you have more time until retirement (i.e., age 55 and under):

• Dig deep into how much you’re saving. If your employer provides access to a 401(k) plan, for example, check to see if you’re enrolled. Some plans have what’s called auto-enrollment, but many do not—in that case, you have to elect to enroll. The best way to check if you’re enrolled is by contacting your HR department. If you have an account at Principal, you can check your enrollment on your dashboard after logging in. Remember: Saving something, even just a little to start, helps you in the long run.
• Get your maximum employer match. If you do have an employer-sponsored 401(k) plan and your employer offers a match, consider maxing out your contributions to get the full match.
• Build savings where you can. Can you increase your 401(k) contributions by 1% each year? If not, can you save in either an individual retirement account (IRA) or in a Roth IRA? Remember, one goal is to save as much as you can now.

Many factors surrounding retirement can be out of our control, and changes to Social Security benefits are one of them. Even so, preparing now can help ensure you’re saving enough for the retirement you want.