Could you live off of $18,516 a year? That’s exactly how much the average retired worker will receive in Social Security benefits this year. It’s simply not enough. We need to increase Social Security benefits.
An interesting article by The Motley Fool explains why Social Security benefits are lower than most people think. Simply stated, Social Security is not supposed to be a retiree’s sole source of income. Reporter Christy Bieber uses the analogy of a three-legged stool to describe retirement funding. She says Social Security benefits were meant to replace about 40% of your pre-retirement money, with the balance coming from pensions and retirement investments.
The problem is most Americans’ stools are missing legs. Very few occupations offer pensions today and many people just aren’t able to put enough money away for retirement. That’s why Social Security has become the primary source of retirement income for many people – but the system was not designed for that purpose.
What Can You Do?
People should start planning for retirement early – the earlier, the better. You can start by logging into your Social Security account to see what your projected benefit amount will be when you retire. Next, think about how much money you think you will need to live comfortably as a retiree. This will show you how much money you will need to save for retirement through 401(k), IRA, and other investments.
If you’re still working, you can also try to get a benefits boost by increasing your salary. Social Security benefits are based on average inflation-adjusted wages from your 35 highest earning years. So, the more money you make now, as a worker, means more money in benefits as a retiree.
When you claim your Social Security benefits also affects how much you receive. Bieber says if you wait until you are 70 to claim your benefits, you can “avoid early filing penalties and earn delayed retirement credits so you can get the largest benefit available to you.”
The big takeaway from this is that you should not rely on Social Security to be your sole source of income during retirement – you will probably need some sort of savings.
That being said, The Seniors Trust is working diligently to ensure American workers receive all of the benefits to which they are entitled. This grassroots project is committed to increasing monthly benefits and securing the long-term solvency of the Social Security program through passage of the Social Security Expansion Act. The full text of the bill can be found here.
This legislation guarantees:
- A $65 a month raise in your Social Security check…
- A fair COLA each year that keeps up with inflation…
- And enhanced benefits.
With so many challenges facing seniors during retirement, this legislation is absolutely essential. It’s our best chance to expand Social Security benefits and improves the lives of retirees.