In celebration of Social Security’s recently passed birthday, let’s talk about four things you should know about it. How can you plan for Social Security as a part of your retirement plan?
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It’s not David’s birthday we are celebrating today, but the birthdate of Social Security. This important birthday happened a few weeks ago, but it gives us a good reason to discuss four things we need to consider when planning for Social Security before retirement.
Can you believe that 65 million people are currently drawing from Social Security? Of those, 47 million people are retired. The average check is $1,556 per month, but what will your monthly amount be? Check out SSA.gov to learn more about what yours may be. There are interesting projection tools to help you get a better estimate for retirement. The closer you are to retirement age, the closer you likely will get to the correct estimate.
Social Security represents about 40 percent of a person’s retirement income according to the Social Security Administration. You probably want your retirement income to be similar to your monthly income when you were working. If Social Security is 40 percent of that, where does the rest come from? David runs some numbers to give you an idea of what this could look like.
What happens at “full retirement age” and when is it? This number seems to be constantly changing by Congress in order to keep it sustainable. Life expectancy has continued to grow way past what it was in 1935 when Social Security began. The age will probably go up in order to continue to secure it for the long-term.
Everybody knows that the longer you wait to claim Social Security, the bigger the monthly check. Are there reasons to not wait until age 70? David says there are reasons to consider taking it earlier. If you are married, one spouse may benefit from starting Social Security earlier. If you have health concerns, there may be reasons to start it sooner as well. Connect with a financial advisor to make an educated decision on when the best time is for you to claim Social Security.
Listen to the entire episode or skip ahead using the timestamps below.
[0:33] – Happy Birthday to… Social Security!
[2:28] – About 65 million Americans draw on Social Security.
[4:38] – Get an estimate of what your Social Security benefits may be.
[6:38] – What’s the average retired person’s income from Social Security?
[9:55] – What is full retirement age?
[12:42] – Are there reasons to not wait until age 70?
“Full retirement age is probably going to go up the next time Congress addresses these types of issues regarding: how do we secure Social Security for the long-term?”
– David Dickens