More than likely, Social Security will represent a portion of your monthly retirement income. But, how big of a role will it play in your overall retirement strategy? According to a recent survey performed by The NHP Foundation, 62% of retirees who’ve created a budget stated that Social Security income will contribute to at least half of their monthly retirement income. Based on data compiled by the Social Security Administration, the average monthly benefit for retired workers is $1,404. So, if it represents half of your monthly income, would $2,808 a month be sufficient for you to live out the retirement you’re planning for? While Social Security won’t provide for your entire income in retirement, it can help supplement it in certain areas. So, make sure that you include a plan for filing and collecting your Social Security. Not knowing what income to expect, and how to collect your legal maximum benefit can potentially derail you in retirement.
One of the most important first steps you can take in determining Social Security’s role in your retirement is to outline your budget. Write down and identify all of your expenses that you have today to help give you a better sense of what you’ll be spending in retirement. Then, identify all potential income sources you will draw from once you’ve retired. Next, try and test your retirement budget with your lifestyle in mind. With added time on your hands, you’ll find that many of the activities you seek out can be quite costly over time. Finally, you can look to the Social Security Administration’s website to help calculate your potential earnings based on specific information that you provide like your date of birth, current annual earnings, and future retirement date. This will help give you a preview of exactly how much Social Security will cover in terms of your monthly retirement income. And, if you’re interested in a comprehensive financial review where we’ll examine your current Social Security strategy and discuss ways to help optimize your Social Security benefits, then CLICK HERE to request your one-on-one, complimentary review.
Hopefully, throughout your working career, you’ve been able to contribute to your retirement in other areas like with a 401(k) plan or IRA. That way, once you’ve hit retirement age you’ll have more income to help supplement your Social Security benefits. And, depending on your individual situation, you may be able to help increase those benefits. One of the easiest ways to accomplish this is to delay claiming for as long as possible. If you begin claiming before your full retirement age, then your benefits could be reduced by approximately 6.7% each year. But, if you’re able to put off claiming until after you reach your full retirement age, then you could see your benefits increase by approximately 8% each year, up until age 70. Another way to help increase your Social Security benefits is to continue working another couple years if you’re at your highest paying job. Social Security benefits are partially determined based on your highest 35 years of earnings (adjusted for wage growth), and if you haven’t been working at your highest paying job for 35 years, then you can potentially increase your benefits by working another couple years there.
Ultimately, if you’re counting on Social Security to front most of your bills in retirement, then you’ll want to make sure exactly how much you’re going to receive every month. Also, don’t forget to compare your additional income sources against your budget, and how much you anticipate spending in retirement. The right strategy for you is completely dependent on your individual situation That’s why we offer complimentary Social Security maximization reports where we’ll walk you through when to claim, how to file, and strategies for maximizing your benefits. CLICK HERE to request your no cost, no obligation review!
