Everybody knows that it is impossible to live on Social Security assuming it is there when the times comes. The reality is that Social Security in the United States is headed toward insolvency. In fact, if you look at the Social Security statement that comes out every year, you will see a little asterisk that says if Congress does not act soon sometime in the future Social Security will only be able to pay out 70% of what is indicated today. But who knows for sure if that is even correct. As a result, by the time someone is 50 and even before, we must plan for earnings in retirement to live comfortably until the end comes.
Since many are living to be 90 or more, planning for at least 20 years after retirement seems like a safe bet. It is ok to die with nothing if having enough to live comfortably requires it. This means having the money to pay for food, housing and medical care and other essentials; but it could also mean the ability to buy home care and or pay for a senior living community. Some people buy insurance to provide for home care or senior living; but it is expensive. The policies in the market place today usually are good for 3 - 5 years of coverage. Of course, the longer the coverage the higher the annual premiums. Having a home paid off by the time of retirement is a good place to start. Downsizing at 50 may make sense too. In a worse case scenario the home can be sold to use the equity to buy services and or a reverse mortgage is possible to provide supplemental income.
When there is no longer any income coming in from work, the presumption is that monies invested in the stock market or real estate can be utilized monthly as income just like a paycheck. Many people have IRA's or 401K's that must be tapped at 70 1/2. The government requires that about 1/15 of the funds in those savings accounts start to come out in order for federal and state income taxes, if applicable, to be paid on what was tax deferred income. Medicare is not free. It is means tested and so the monthly premium for Medicare comes right out of Social Security checks. There are many people paying more for Medicare with a private insurance supplement than they paid for company sponsored health care when they worked because of means testing. So the cost of health care must be factored into the cost of living. Planning for retirement is essential. The time to start is now and the younger the better.
