If you are facing retirement with the prospect of living solely on Social Security, there is good reason to be nervous.

Social Security benefits are a function of what you've paid into the system. The less you make, the less you've paid in and the less you'll receive in benefits.

You can obtain an estimate of your future benefits from the Social Security Administration website (ssa.gov). Your benefits will be largely a function of your ten best income years, adjusted for inflation.

The income will be about 25 to 50 percent of your income, depending upon a variety of factors. If that is your sole source of income, your tax burden will be light so you can expect to spend most of that money on your living expenses.

You will have a choice as you approach retirement, of retiring early with a reduced benefit or later and receiving a larger benefit. Generally, your benefit increases only until age 70; thereafter, there is no increase associated with not accepting your payments.

Medicare will cover your hospital stays fairly well, but your medication won't be covered unless you enroll in a special drug plan. Even then, your medications won't be covered 100 percent. Healthcare will likely eat up a fair chunk of your Social Security income. If you are healthy before retirement, it is unlikely you will finish retirement in the same condition.

If you have your home paid off and can live rent free, your Social Security income will go farther. On the other hand, if you have a mortgage or don't own your home, Social Security may not provide sufficient income for you to rent a place to live, cover all of your medical expenses and leave you with enough money for food and clothing. Owning a car would almost be out of the question.

Many communities provide subsidized housing options for people on fixed incomes. In my community, for instance, public housing for seniors is available at a cost of one third of a retiree's income, making it affordable. A senior receiving just $600 per month pays rent of just $200. In that situation, Medicaid picks up more of the medical expenses so much of the remaining $400 per month can be used for food and incidentals.

Living solely on Social Security, in most communities in America, is possible, but not pleasant.

If you own your home without a mortgage, your Social Security will go farther. A reverse mortgage could pay additional amounts each month - borrowed against the value of your home - making your life more comfortable.

If you still have any time before you retire, focus, first, on getting your mortgage paid off so that when you retire you have a free place to live. Any savings you can set aside before you retire will bring real comfort over the years. Be careful with your savings to make it last as long as possible.

If you have more than ten years to retire, make a comprehensive plan to own a home debt-free and have at least two year's income saved up. With a home and that much savings, your retirement will be remarkably different from one relying entirely on Social Security.