Most retirees depend on Social Security as a cornerstone of their income. The trouble is that those benefits stretch far less than many people expect. Finance expert Suze Orman has laid out a pointed warning about how much of the typical Social Security check gets consumed by just a handful of predictable but often overlooked expenses.
Based on Orman’s figures, the average retiree ends up spending the equivalent of roughly three months’ worth of Social Security payments on just three cost categories each year.
Below are those expenses, along with context on why they catch so many seniors off guard and what you can do to make sure they don’t drain your retirement finances.
The three expenses Suze Orman says come at a huge cost
Orman identifies three spending categories that tend to blindside retirees:
- Rainy day expenses: Retirees typically spend around $2,400 per year on costs that feel unexpected but are, in practice, nearly inevitable. Orman points to home maintenance and vehicle repairs as the most common culprits. Older houses and aging cars don’t give you much warning before they demand attention.
- Healthcare: Out-of-pocket medical expenses average around $2,000 per year, according to Orman, even though many retirees assume Medicare will cover most of what they need. That assumption routinely proves costly. Medicare Part B’s standard monthly premium alone is $202.90 in 2026, and that’s before deductibles, co-pays, dental, vision, and hearing costs that traditional Medicare simply does not cover. Fidelity estimates a 65-year-old retiring today can expect to spend roughly $172,500 on healthcare costs over the course of retirement. Retirees with significant prescription drug needs often face considerably higher annual out-of-pocket bills than Orman’s baseline figure.
- Family assistance: Many retirees continue supporting adult children long after leaving the workforce. Orman puts the average annual cost for retired households at around $1,700. That figure is consistent with broader research: a 2025 AARP study found that parents age 45 and older who provide financial help to adult children contribute an average of roughly $7,000 per year, though that population includes higher-income households that give more.
Add those three figures together and you arrive at roughly $6,100 per year. Since the average Social Security check for retired workers now comes in at approximately $2,083 per month, according to the Social Security Administration‘s most recent data, those spending categories alone consume close to three full monthly checks. Looked at another way, that is roughly a quarter of the Social Security income a retiree collects over an entire year.
Retirees need income beyond Social Security
Some of these costs are, in theory, avoidable. Helping adult children is a choice, even if it is one most parents feel strongly compelled to make, especially during periods of economic pressure on younger households. Rising housing costs and stagnant entry-level wages have made it harder for adult children to achieve financial independence, which is why so many retirees find themselves serving as a financial backstop well into their own retirement years.
The other two categories on Orman’s list are far less optional. A roof that leaks or a car that breaks down in a city without public transit is not a discretionary expense. Neither is a hospital stay or a course of prescription medications. The idea that Medicare will cover all of a retiree’s medical needs is one of the most persistently costly misconceptions in personal finance. Coverage gaps in dental, vision, and long-term care, combined with Part B premiums, deductibles, and coinsurance, mean that out-of-pocket healthcare spending remains substantial even for retirees with solid coverage.
Social Security was never designed to be a complete retirement income. The program was built to replace roughly 40% of pre-retirement earnings for the average worker, which makes supplemental savings not a luxury but a necessity. Building a portfolio through a 401(k), IRA, or other investment accounts well before retirement is the most reliable way to ensure those three categories of expenses don’t swallow a disproportionate share of your fixed income. If retirement is still in your future, working with a financial advisor to map out projected expenses and identify your likely income gap is a practical first step.
Editor’s note: This article has been updated to reflect the most current average Social Security retirement benefit of approximately $2,083 per month (May 2026 SSA data), replacing an earlier January 2026 estimate of $2,071, and now includes the standard 2026 Medicare Part B monthly premium of $202.90 and Fidelity’s updated lifetime healthcare cost estimate of $172,500 for a retiree age 65.
Contact [email protected] for any questions or corrections.
Top Gaining Stocks
Top Losing Stocks