Mar 7, 2026
While the purchasing power of the average Social Security benefit has increased over the decades, today’s retirees face financial hurdles that can limit the impact of these monthly checks.
In 1976, the average Social Security benefit was $224.86 per month for retired workers (1), which is equal to $1,285.16 today. By comparison, retirees in 2026 get an average benefit of $2,071 per month, while those with disabilities receive $1,630 (2).
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Here’s why some retirees are struggling with the cost of living today compared to fifty years ago, and why concerns for the longevity of the Social Security program have current and upcoming retirees worried.
Social Security, then and now
Rising housing costs and health care expenses are two financial factors that are working against today’s retirees.
Housing
When it comes to housing, the median monthly rent price in the U.S. in 1980 was $243, Nasdaq reports (3). That’s equivalent to $959 today. However, as of January 2026, median rent prices in the top 50 metros in the U.S. were $1,672 (4), which is nearly double the inflation-adjusted 1980 cost.
Furthermore, the median cost for a house in 1980 was $47,200, according to CNBC Make It (5), which would be equivalent to $186,291 today. As of January 2026, the median cost for a house is $396,800 (6), which is more than double the adjusted 1980 cost for a house.
Health care
The cost of health care and health insurance has also risen dramatically in the last 50 years, even as government spending for health care programs has skyrocketed over the same period.
The average annual family health insurance premium in 1977 was $609, with employers paying $517 and employees paying $92, according to the National Library of Medicine (7). In today’s dollars, that’s $3,268.19 total, with employees paying $493.72. However, today’s average monthly health care premium is $1,766 per month for those 64 and older, as Kiplinger reports (8). That equals $21,192 per year.
In 1976, the federal government’s spending on health care was $638 per citizen (9). As of 2023, that government spend was at $13,432 per person, the highest of any high-income nation and nearly double the average spend of comparable countries (10).
Making matters worse, funding for the Social Security program is projected to be insolvent by 2034, at which time the Social Security Administration would only be able to pay 81% of benefits, CNBC reports (11). Many upcoming and current retirees found this revelation to be alarming, creating speculation that the program would need a massive overhaul if it were to continue to be viable in the future.
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How to prepare for retirement
With the cost of living so much higher for today’s retirees in many critical ways, relying on Social Security for retirement isn’t a great idea.
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And yet, a third of older adults in the U.S. are dependent on their monthly check for survival. The Senior Citizen’s League reported that as of 2024, 67% of Social Security recipients rely on their monthly benefit check for more than half their income (12).
Social Security is so critical because nearly 57 million Americans don’t have a workplace retirement savings plan, according to the Pension Research Council (13). Social Security, however, is only meant to replace about 40% of pre-retirement income, which means today’s workers need to prepare for retirement so that they are not entirely reliant on benefit checks in their golden years.
Related: 4 money moves that could change your retirement
How to save for retirement
With so many workers unprepared for retirement, it’s important that younger generations try to save as early as possible. In order to ensure you’re not reliant on Social Security in retirement, consider the following saving strategies:
- Set a budget that includes room for retirement savings, and try to live frugally.
- Calculate how much your living expenses are today, and try to project how much they could be in retirement.
- Research whether an IRA or Roth IRA is best for savings at your current pre-retirement stage.
- Open a health savings account to prepare for medical costs in old age.
- Ensure your investments are properly diversified, so that a downturn in the stock market won’t affect your retirement plans.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Nasdaq (1, 3); Social Security Administration (2); Realtor.com (4); CNBC Make It (5); Macrotrends (6); National Library of Medicine (7, 9); Kiplinger (8); Peterson-KFF Health System Tracker (10); CNBC (11); Senior Citizen’s League (12); Pension Research Council (13).
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Rebecca Holland is dedicated to creating clear, accessible advice for readers navigating the complexities of money management, investing and financial planning. Her work has been featured in respected publications including the Financial Post, The Globe & Mail, and the Edmonton Journal.
