Embarking on the journey towards a brighter retirement involves a few strategic steps. Planning for retirement demands careful consideration, especially when it comes to understanding the sources of your income. For a multitude of older adults, Social Security stands as a foundation.
According to a 2023 report from the Transamerica Center for Retirement Studies, a significant 41% of baby boomers anticipate that their retirement income will primarily stem from Social Security. If your retirement is just around the corner within the next year, it’s the opportune moment to acquaint yourself with what Social Security has in store. Let’s explore three proactive moves you can make right now to ensure you’re maximizing the benefits that await you.
Your Ultimate Check List Before Retiring
Take a look at your retirement account balance: Even if retirement hasn’t arrived yet, you can still catch a glimpse of your future benefit amount. Take a peek at your statements, accessible online through your mySocialSecurity account if you’re not receiving paper statements.
Your estimated benefit amount, based on your real earnings throughout your career, will give you a clearer picture of how Social Security contributes to your financial landscape. Armed with this knowledge, you can better assess the sufficiency of your savings.
Your estimated benefit, derived from your earnings, represents the amount you’ll receive at your full retirement age (FRA). Opting to claim benefits before or after this age will impact your monthly payout. If you claim as early as age 62, expect a permanent reduction of up to 30%. Conversely, delaying benefits until age 70 ensures not only your full benefit amount but also a bonus of at least 24% per month for life.
Social Security has faced challenges, with the possibility of benefit cuts or decreased purchasing power looming. Depletion of trust funds by around 2034 is a concerning prospect, leaving only enough to cover approximately 80% of future benefits. While there’s hope for a congressional solution before 2034, the risk of a 20% cut in benefits exists. Additionally, Social Security has struggled against inflation, experiencing a 40% loss in buying power since 2000. Given these uncertainties, having a backup plan is prudent, especially if Social Security is a significant part of your income strategy.
Social Security Recipients to Receive Two Checks This December
In December, Social Security recipients are in for a double treat with not one, but two checks coming their way, courtesy of the Social Security Administration. Well, these extra checks are headed to those eligible for Supplement Security Income (SSI) benefits, adding a bit of festive cheer. The first check is set to brighten up the beginning of the month, while the second is slated to arrive just before we bid farewell to the current year on December 29.
But, here’s the quirky twist: with the bonus of two payments in December, Social Security recipients will experience a brief pause in January without their usual check. It’s just a peculiar twist in the payment schedule, making this December a double-dose delight and giving everyone a heads-up for a temporary pause in the new year. Cheers to a December to remember.