it's worth noting that $25k pretax (and note $25k seems to have been a high), even at a modest tax rate, could easily fall (post income, fica, etc) to $18k post tax. Or $1500/mo.
medicare should start shortly after the 65th birthday, but people still have to buy Part B and either part C or D. afaik part B requires a typical 20% contribution; this can be quite painful if you're living / attempting to maintain a house on $1500/month
old age is no picnic, particularly in the usa, and that goes double for people who don't have significant savings
Doing a fast calculation, someone who earned $25k (this year, not every year with prior years taking into account how earnings change) would probably get about $14k/yr in social security. So, it isn't a huge amount of money, but it would bring it up.
The two are, most assuredly, not mutually exclusive.
Contracting positions are hell on earth if you don't put money into savings. Even if you work 25 years you need to put money away. We really don't have a national pension system[1].
I would be curious how the whole Microsoft contracting lawsuit would apply in this case. It seems it would have some relevance.
1) and looking at how underfunded the state one are, I don't see any hope in that direction