When they start planning for retirement, the main question in many Americans’ minds is, “Will Social Security last?” While Social Security benefits are one of the easiest ways of getting a retirement income, there is an ongoing debate about whether the payments are enough to cover your expenses in retirement.
If you need Social Security recommendations, continue reading to get a few tips from experts.
Will Social Security Last?
When the Social Security benefit was first introduced, the life span of the older generation was shorter. Lifespan has gradually increased over the years as medicine has improved and lengthened our lives. For this reason, some believe Social Security retirement income may not be enough. Aside from that, other factors may make your Social Security income not enough for your retirement.
Lower Standard of Living
If you are someone who is used to a higher standard of living, you may notice that the Social Security income benefit amount does not provide enough money to keep up your lifestyle.
You can get up to $3,011 a month on your Social Security income provided that you get your Social Security benefit at full retirement age instead of at the minimum age of 62. However, the average Social Security income in 2020 for most Americans is only a little over $1,503 per month, as many people need their benefits earlier.
Comparing this number to the average monthly income of Americans in 2020, which is $4,056, a lot of people in their retirement have to adjust to an income that may be just a third or less of their past working income.
Maybe you enjoyed your younger years a little too much, and when you retired, you realized that you have a lot of debt than you must pay for. This is the situation for a lot of Americans, as the record for consumer debt has ballooned to $4 trillion.
Aside from this, student loan debt has increased almost eight times faster than wages, thus creating a burden for a lot of people who apply for student loans to live a comfortable life. This also affects older people, as $260 billion of the 2018 consumer debt are student loans for people over 50.
If you do not have enough savings and are planning to rely on your Social Security income when you grow old, consumer debt can negatively impact your finances.
Receiving Social Security Benefits Early Versus Late
Since Social Security planning is vital for a lot of Americans, you have to be informed about the difference between getting your Social Security income benefit at an earlier or later age.
A person can receive their highest Social Security retirement benefit at the age of 70 because of the delayed retirement credit. However, for people who want to retire early, their benefit amount may be reduced by up 30 percent of their potential Social Security benefits.
This is why it is highly recommended to apply for a late Social Security benefit. This way, you maximize your retirement savings and have more money to use in the future.
Social Security Tips
The following are examples of Social Security advice for people who need help with their retirement plans and goals.
Social Security Tips for People With No Savings
People with no savings need certain Social Security recommendations that can help them to avoid a financial crisis after retirement. Here are some Social Security tips for people with little to no savings.
Continue Working While Receiving Benefits
While most people would rather spend their retirement enjoying their golden years, it is not an option for a lot of Americans. To get additional Social Security help, you can apply for part-time or full-time jobs after retiring.
You can start receiving your benefits and look for a full-time or part-time job that can pay for your necessary expenses while you put your Social Security income into a savings account.
Manage a Business
While you are still working, opening a business can actually help you get more income even if you are at your home all day. This is one of the best ways of still receiving an income if you do not want to work a regular work schedule.
There are several ways to manage a business during retirement, such as the online retail market or even just selling other products from your hobbies.
Sell Houses, Cars and Other Properties
When you reach your 60’s, you may have properties that might not be advisable to keep anymore. You can sell some of your assets and put the proceeds in your savings account so that you have money when you have financial difficulties. For older people, having more than one or two houses is no longer necessary, as you may find yourself traveling less and less. You can also move to a state where the cost of living is much lower than your current place.
When you reach your retirement age, driving a car can be more of a burden than a benefit. Aside from this, modern technology offers a lot of alternatives to owning a car, such as Uber, Lyft and other rideshare services you can access with a phone.
Social Security Tips For People With Enough Savings
People who have saved enough money for retirement need Social Security recommendations that are focused on maximizing their money to make sure they will get the most out of it.
Invest in Stocks or Other Assets
If you have enough money to enter the stock market, all you will need is a computer and internet connection. You can start earning a passive income that can help you down the road. It might be tricky to begin at a later age, but it does not mean that you will not get enough money to keep up your lifestyle.
Invest In High-Yield Savings Accounts
You have to research which banks give the highest interest rate for your savings account to help you earn more money. This way, you can deposit extra Social Security income into a savings account that earns you interest.
Budget Your Retirement Income
Budgeting is essential. If you apply for a late retirement Social Security benefit, then you have more money to budget for each year of your retirement. Remember to include unexpected expenses, such as medical emergencies, in your budget.