7 Ways Wealthy Retirees Spend Their Social Security Benefits

Most people want to retire rich. In fact, for many Americans, that’s the only reason to work hard and save all you can. Like many financial systems, Social Security payments may not be equal, but they do try to be equitably proportionate.

Contents

They Pool the Money Into Other Assets The Little ‘Extras’Certain Mandatory Costs Vacations Charitable Donations Lifestyle Upkeep and Maintenance Further Investments and Legacy Planning

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Wealthy retirees who have paid into the system will end up receiving Social Security benefits just like everyone else. According to the Social Security Administration website, benefits are calculated based on the “average indexed monthly earnings.” This is determined by looking at how many years you worked and how much you earned during each of your 35 highest-earning years.

As of January 2025, the average Social Security paycheck is about $1,976 a month. However, for those who earned an exceptionally high salary during their working years, the amount of their benefits could be much higher. For example, the maximum monthly payment is $5,108 for those who retire at age 70, and $4,043 for those who retire at retire at full retirement age.

So, what exactly are the truly wealthy retirees spending their Social Security checks on? Here’s what the experts say.

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They Pool the Money Into Other Assets

“I believe most wealthy retirees would be hard-pressed to differentiate between expenses paid for with Social Security versus other income sources,” said Stephen Kates, CFP and principal financial analyst at Annuity.org. “For truly wealthy people, Social Security is nice to have but makes up a small fraction of their income and is simply pooled via direct deposit into their checking or savings accounts.”

With Social Security, it’s important to remember that your benefit amount will be lower if you earn more than a certain amount — but only if you collect benefits before the full retirement age. In 2025, the full retirement age is 66 years and 10 months, which applies to people born in 1959.

So, for wealthy retirees who wait to collect until they’ve reached this age, there won’t be any impact on how much they receive. Along with this, the SSA doesn’t consider annuities, pensions, investment income, veterans benefits, interest or government retirement benefits as earned income.

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The Little ‘Extras’

Social Security was designed to supplement other retirement income or benefits, though many people don’t view it that way. For wealthier retirees, however, this extra money is just that — extra.

“Most of my wealthy clients have enough saved that Social Security isn’t their main form of income. They typically don’t discriminate between the source of the funds when they all get mixed together in their bank account,” said Robert Persichitte, CPA, CFP, CFE and financial planner at Delagify Financial.

Because of this, they’re more likely to use their monthly Social Security check on things that could be considered “extra.” This might be something small, like dining out, or it could be something more major. Whatever the case, it’s unlikely to be necessary money.

Certain Mandatory Costs

Just like anyone else, wealthy retirees still need to pay for everyday necessities like health insurance and other day-to-day expenses. For some, that’s what their Social Security check is for.

“Essential expenses are the best targets for spending guaranteed income so that the mandatory costs of living are backed up with a source of income that never changes,” said Kates.

As for healthcare, wealthy retirees are still generally eligible for Medicare once they reach the age of 65. Those who need more coverage may use their check for Parts A and B.

“Medicare premiums are automatically deducted from Social Security and provide a clean way to cover all standard Medicare premiums when you are enrolled in both programs,” said Kates.

Vacations

According to Ben Klesinger, co-founder and CEO of Reliant Insurance Group, affluent retirees often use their Social Security benefits for travel. “They enjoy broadening their experiences through extended vacations or short-term stays abroad,” he said.

This makes sense considering that travel is an optional — but still often highly desired — expense, and wealthy individuals typically see Social Security as a source of supplemental income.

Charitable Donations

Klesinger also pointed out that wealthy retirees are more likely to use their Social Security checks for charitable donations to their communities or causes they support. Donating money has the added benefit of being tax deductible in most cases.

Generally, charitable donations are tax deductible up to 60%, depending on the organization and whether the donation itself counts as a qualified contribution.

Lifestyle Upkeep and Maintenance

Many people have to downsize or find other ways to lower their expenses in retirement. Even though this isn’t as much of a concern for the affluent, that Social Security check can still come in handy if they need to cover more expensive things.

Klesinger said that many of the wealthy retirees he’s worked with put their check toward things like home renovations, high-end vehicle upkeep and luxury maintenance to ensure their lifestyle remains uninterrupted. After all, these individuals can afford discretionary expenses that boost their overall quality of life and personal satisfaction.

Further Investments and Legacy Planning

Even those who are already wealthy often want to find ways to continue to build their wealth and leave behind money for the next generation.

Allocating their entire Social Security check to fund trusts or grow their investments — such as through stocks, real estate investment trusts (REITs) and alternative investments — can benefit both themselves and their heirs for the long term.

Caitlyn Moorhead contributed to the reporting for this article.

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