100 Million People Do Not Know This Basic Social Security Fact — Do You?
When it comes to retirement planning, about 100 million people are making a catastrophic error. According to a recent poll by Nationwide Financial, roughly 40% of Americans believe that Social Security income alone should be enough to live on.
Millions of Americans believe this is likely to be in financial trouble if they base their savings goals on this misunderstanding. This is why.
Americans Overestimate The Importance Of Social Security In Retirement.
Future retirees who believe they would be able to rely completely on Social Security may be astonished to learn how low their benefits will be once they begin receiving their checks.
While the maximum Social Security payout in 2021 is $3,895, just a small percentage of the population will get anything close to that amount. For retired workers, the average benefit is only $1,558. And those who claim Social Security benefits early, which is highly common because most individuals require these benefits when they are still in their early 60s, would receive substantially lower average amounts. Early claims lower Social Security income because, while benefits are available as early as age 62, retirees who file early face early filing fines and lose out on the opportunity to receive delayed retirement credits.
If your Social Security retirement income is expected to be less than $19,000, it’s evident that relying on these benefits as your primary source of income will not work out.
But the truth is that they were never supposed to be your sole source of income because Social Security was created to supplement your savings and pension. It only restores around 40% of your pre-retirement wages.
How to Increase Your Social Security Benefits
You don’t want to be one of the 100 million Americans who will be shocked if they try to survive only on Social Security income. As a result, you must learn the truth about these benefits and begin making plans to supplement them as soon as possible.
Finding a workplace that offers a defined benefit pension is one option. That’s a pension plan that guarantees you a specific amount of money when you retire, with your monthly benefit determined by criteria including how long you worked with the company and how much you earned. However, finding a job that offers this kind of benefit can be extremely tough. If you want a pension, your best choice might be to work for the government, as you’re more likely to acquire one from a state or federal workplace than from a private corporation.
It’s even better to start saving as soon as possible to develop your own retirement nest fund. You can do so by contributing to a 401(k) plan offered by your company or by opening an individual retirement account with a brokerage firm of your choice.
You should calculate how much money you’ll need by logging into your Social Security account to receive an accurate picture of what these payments would give and then save enough money to cover the deficit. You can avoid financial hardship as a retiree if you follow these procedures.
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Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.
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