Elon Musk, Worth More Than $900 Billion, Says Saving for Retirement Is Pointless. Try Living on a $2,095 Social Security Check
Elon Musk says retirement savings will be pointless within two decades, but the average retiree is already trying to cover real bills with a single monthly check. Here is what that gap actually looks like, and the one decision that…
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Elon Musk, whose fortune Bloomberg recently estimated at $924 billion, said October 29 that saving for the distant future is pointless. He’s betting artificial intelligence and robotics will create a world of abundance, making retirement savings unnecessary within the next 10 to 20 years.
For millions of retirees collecting Social Security, the math looks very different. The average retired-worker benefit is estimated at $2,095 a month before the 2027 cost-of-living adjustment, or $25,140 a year.
One retiree recently asked an online forum where people actually manage to live on Social Security alone. One of the first replies made a sharp point: if your house is paid off, you are not really living on Social Security alone. That gap between the check and the bills drives the whole debate.
What Abundance Would Have to Replace First
Musk’s case rests on AI, robots and cheap energy. They will do most of the work, push the cost of goods and services toward zero, and fund a “universal high income” covering everyone’s basic needs. He has also admitted the transition could be “bumpy.”
Today’s retiree lives in the meantime. Most people on Medicare pay the standard $202.90 monthly Part B premium, often deducted from Social Security. That would leave about $1,892 from the average check before rent, utilities, groceries and other expenses. Housing, food and utilities can eat up most of that before a car repair or a dental bill even comes.
Your Claiming Age Matters More Than Any AI Forecast
Musk is describing a possible future. Social Security is still paying benefits under today’s rules. The 2027 cost-of-living adjustment is 3.6%, boosting the estimated average retired-worker benefit by $75 to $2,170 a month. That raise helps keep up with prices, but it leaves retirees just as dependent on the monthly payment as before. And increases vary: retirees received no COLA in 2010, 2011 and 2016.
The biggest factor you control is when you start. For most people nearing retirement, full retirement age is 67, and taking at 62 cuts the check by up to 30%. Waiting until 70 makes it 24% higher. (We boiled the 62 versus 67 versus 70 question down to a single-page framework in a free guide here.)
In dollars: a worker in line for $2,000 a month at full retirement age would get about $1,400 by taking early, or about $2,480 by waiting.
That’s a $1,080 monthly difference, or $12,960 a year, between claiming at 62 and 70. Future cost-of-living increases also build on the larger benefit.
The program’s long-term finances are a separate question with a known date. The trustees project that the combined trust funds will run out in 2034. After that, future payroll taxes would still cover about 83% of scheduled benefits unless Congress acts.
Where Your Savings Fit Next to the Check
Your benefit is based on your highest 35 years of covered earnings. If you worked only 30 years, the five missing years count as zeros and drag your average down, but a few extra working years can quietly lift a lifetime benefit.
Savings cover whatever the check doesn’t. Fidelity’s retirement guidelines assume your savings will need to replace about 45% of your pre-retirement income on top of Social Security. Workers also tend to underestimate how much they will lean on the program: only 36% expect it to be a major income source, compared with 66% of retirees who say it is one.
Two Moves That Hold Up No Matter Who’s Right
- Do the gap math before claiming. Log into your my Social Security account, look up your estimates at 62, 67 and 70, and set them next to your actual monthly bills. The difference between the two is the job your savings have to do, and knowing that number will help you far more than guessing when AI might change the economy.
- Think carefully before claiming early. You may be able to adjust your spending or savings later, but claiming before full retirement age generally means a smaller monthly benefit for life. If you’re already retired, build your budget around the check you get today.
Musk may turn out to be right someday. But millions of retirees have bills to pay long before his vision of abundance arrives. Their Social Security checks are real, their expenses aren’t going away, and a billionaire’s prediction is no substitute for a retirement plan.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
