Want Retirement Income That Doubles Your Social Security? Here’s How

In 2022, the average Social Security benefit will total $1,657 each month. Since this won’t provide enough income for most people to live on it, supplementing your retirement benefits with income from savings is essential.

Social Security benefits are designed to replace about 40% of pre-retirement income, when around 80% is what you’ll likely need.

So, bringing in a total household income that doubles your Social Security should leave you in pretty good shape. But how can you make that happen? Here are the steps you’ll need to take.

Calculate your target income

If you want to double your Social Security checks, your first step is to find out how much extra income you’ll have to bring in.

If you’re in line for the average $1,657 benefit, you’d set the goal of earning $1,657 from your savings. If you earn more or less, that will shape the amount required.

You can check your mySocialSecurity account to see exactly what your future benefit will be if you aren’t retired yet but hope to end up with double the household income from Social Security alone.

Decide on a safe withdrawal rate

You’ll want your investments to produce enough that your household income is double your benefit for your entire retirement. To do that, it’s crucial to make sure your accounts never run dry by choosing a safe withdrawal rate so you don’t take out too much money too fast.

There’s a traditional rule called the 4% rule, which postulates that your money won’t run out if you begin your first year of retirement by taking 4% out of your account and then adjust withdrawals annually to keep pace with inflation. You may decide to follow this rule, or take a different approach.

Estimate your retirement savings

Once you know the amount of income you’ll need and your withdrawal rate, you can calculate how large your nest egg must be to produce the desired amount.

If your goal is to double the average Social Security benefit of $1,657, you’d aim to produce an annual income of $19,884 from retirement savings. If you’ll be following the 4% rule, multiply this number by 25. You’ll find that your nest egg must have $497,100 in it to provide a $19,884 annual income and leave you with household earnings that are double Social Security alone.

The exact amount you’ll have to save to hit that target will vary depending on how old you are when you start saving and the returns you earn. Here are a few examples:

You’d need to save $252 per month if you were 30 years from retirement and your investments produced a 10% average annual return.
You’d need to save $1,525 per month if you were 15 years from retirement and earned an 8% average annual return.

There are helpful calculators on Investor.gov that will show you exactly the amount to invest to end up with a nest egg that doubles your Social Security income.

Automate your savings

Setting up automatic contributions to a 401(k) or IRA through your employer, bank, or brokerage firm will ensure the necessary amount is invested each month.

You can grow your nest egg and, with the income it produces, double the total amount of household income you get compared to receiving Social Security alone.

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