RETIREMENT Primer – #1 SOCIAL SECURITY

In theory, when you turn 62 years old in America, most people qualify to get some kind of monthly Social Security check for the rest of their life.  That check might not be large, but if you earned money and paid your taxes over a lifetime, that check should be coming.

         Over 40% of people
              ARE NOT SAVING FOR RETIREMENT,
                   They are relying on Social Security alone…

If you are older – say 50, 60, almost 70 – then you might still be able to generate income at work, but you might be direly holding your breath until Social Security kicks in.  Saving Cash Money is still essential, because there is some fear of Social Security turning upside down after the massive Baby Boomer Generation devours it.  Either way, Social Security payout varies depending on when you DECIDE to start taking it.  The earlier you start taking payments, the smaller the monthly check will be forever. Also, it’s important to know that S.S. is calculated based on how much money was earned throughout life.

Quick Social Security facts:

— Average S.S. payout is $1180 per month
— Maximum S.S. payout is $2,360 per month
— To get the maximum S.S. payout you had to earn $107,000 per year
S.S. payout amount is derived from dividing the highest 35 years of income by 12
— You can start taking S.S. at 62, but the payout is increasingly larger if you can wait until 70.  Look at the chart below to see how this works!  If you wait until 70, your payout will be 32% more than if you start taking payments at 62.

SOCIAL SECURITY PAYOUT, per month:
62 years old:  $750/month  —  $9000 / year
63 years old:  + slight increase
64 years old:  + slight increase
65 years old:  + slight increase
66 years old:  $1,000/month  — $12,000 / year  ( 66 – official Social Security payout number goes)
67 years old:  + slight increase
68 years old:  + slight increase
69 years old:  + slight increase
70 years old: $1,350/month   —  $16,200 / year

66 years old is actually the official year of Social Security payout – but you can opt to take payments as early as 62 anyways (at a reduced rate) or hold out until 70 (at an increase rate)

See many calculators, and learn more up-to-date information at: www.socialsecurity.gov

If you have taken many precautions, these amounts of money can sustain you – especially if you have secured yourself permanent housing (and cash for repairs for quite some time) and enough to round out medical insurance needs.  Many people don’t feel the low monthly income of Social Security alone would yield the best retirement, so they aim for greater savings and investments.

Social Security was created as a safety net – since people tend to plan poorly, it was a way of forcing people to pay into their own retirement, the government then grows that investment, and gives it back in your elder years.  Before Social Security, there was a lot of suffering going on with old people who were without money, and work, and many older folks were at levels of EXTREME poverty.

If you are young or old – there are always ways to plan for the future.  Taking a good look at how low Social Security payments are really can become quite motivating.  It’s not always easy to plan for what you can’t see or feel.  Contending with bills today can already be difficult enough, and socking away cash for retirement might seem like a foreign concept.

       Remember, when your wallet or purse gets emptied for no good reason, there is an old person in the future who can’t lift heavy things, or work a 10 hour day, like you can right now – that person is you someday, so take care of them, and keep them in mind from time to time, okay?

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