Can i rely on social security
But in some cases, a more significant move—to a different state or even moving abroad —can be worth considering. If you live in a state with a high cost of living and high taxes, moving to one with a lower cost of living and more favorable taxes can make your budget easier to work with. If you've managed to make your housing more affordable, the next step is reducing other line items in your budget, such as utility bills, transportation expenses, and food costs. The key question that you must ask is: What do you really need to have an enjoyable retirement, and what can you live without?
Could you ditch cable TV, for example, in favor of watching TV online? Could you swap an expensive hobby like golf for a low-budget one like gardening? If you own two cars, could you sell one of them? These kinds of decisions can be tough, but they can make your transition to retirement on Social Security benefits a much smoother one in the long run. And if you've got substantial obligations, such as credit card debt or a car loan, you'll want to get them paid off before retiring, if possible.
Healthcare in retirement can be extremely expensive, so you need a plan to pay for it, especially if you have an existing medical condition. While Medicare can cover some of the costs once you turn 65, it doesn't pay for everything. The amount a year-old couple will need for healthcare costs excluding long-term care during retirement, according to Fidelity Investments.
Medicaid , for example, is available to low-income seniors, and you can have this coverage along with Medicare. It's designed to help pay for premiums and pick up the tab for things Medicare doesn't cover, including long-term care. Retiring on Social Security alone is far from ideal.
If you've still got time before you retire, consider looking for ways to build up your savings. Start by chipping in as much as you can to your employer's retirement plan , if you have one, especially if it comes with a matching contribution.
If you don't have a k or similar plan at work, an individual retirement account IRA is another way to grow your savings. The more you set aside now, the less pressure you'll feel to make your Social Security benefits stretch.
Nevertheless, if you do have to stretch your benefits, downsizing, relocating, cutting your overhead, controlling healthcare costs, and delaying taking Social Security can each make a big difference. Social Security Administration. Accessed Oct. Bureau of Labor Statistics. Social Security. Retirement Planning. Personal Finance. Your Privacy Rights.
To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification.
I Accept Show Purposes. Your Money. As with benefits for a current spouse , these can be up to 50 percent of the benefit amount you are entitled to at full retirement age. But those ex-spouse or spouse benefits don't reduce your Social Security.
They are distinct payments and have no effect on what you receive each month, even if both a current and a former spouse or multiple former spouses are collecting them. You get the benefit you're entitled to, based on your earnings history and the age when you file for Social Security. But it doesn't apply to all working beneficiaries and is not permanent.
The rule only covers people who claim benefits before full retirement age and continue working. In this circumstance, Social Security withholds a portion of benefits if earnings from work exceed a set cap, which changes every year and differs depending on how close you are to full retirement age. On the date when you hit FRA, the earnings test goes away — there's no benefit reduction, regardless of your income. Social Security also adjusts your benefit upward so that over time, you recoup the money that was withheld.
You are leaving AARP. Please return to AARP. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also manage your communication preferences by updating your account at anytime. You will be asked to register or log in. In the next 24 hours, you will receive an email to confirm your subscription to receive emails related to AARP volunteering.
Once you confirm that subscription, you will regularly receive communications related to AARP volunteering. In the meantime, please feel free to search for ways to make a difference in your community at www.
Javascript must be enabled to use this site. Please enable Javascript in your browser and try again. Now Reading:. Membership My Account. Rewards for Good. Share with facebook. Share with twitter. Share with linkedin. Share using email. Myth 1: Social Security is going broke The facts: As long as workers and employers pay payroll taxes , Social Security will not run out of money.
Myth 2: The Social Security retirement age is 65 The facts: Full retirement age, or FRA — the age when a worker qualifies to file for percent of the benefit calculated from lifetime earnings history — is 66 and 2 months for people born in Myth 4: Members of Congress don't pay into Social Security The facts: A common complaint about Social Security is that members of Congress don't bother fixing the program because it doesn't cover them. Myth 5: The government raids Social Security to pay for other programs The facts: The two trust funds that pay out Social Security benefits — one for retirees and their survivors, the other for people with disabilities — have never been part of the federal government's general fund.
Myth 6: Undocumented immigrants drain Social Security The facts: Some have blamed problems with Social Security's financial health on undocumented immigrants draining the system's resources. Myth 7: Social Security is like a retirement savings account The facts: The government does not stow your payroll tax contributions in a personal account for you, to be paid out with interest when you retire.
Myth 9: An ex-spouse's benefits come out of your own The facts: If you are divorced, your former spouse may be eligible to collect Social Security benefits on your earnings record and vice versa.
Family Caregiving. Leaving AARP. But for the most part, unless you're willing and able to live very frugally as a senior, it's wise to have income outside of Social Security during your senior years.
But that may also mean that you're used to living on a lot more income than the typical senior. And so getting by on Social Security alone may not be feasible. But most seniors need more money than that to live comfortably.
And so ideally, it's best to not rely on Social Security alone for retirement, but rather, to save independently. In that regard, you have options. If your company offers a k plan , you can sign up and contribute funds directly out of your paycheck. You may also be entitled to an employer match that puts free money into your account.
If you don't have access to a k , an IRA is another good bet. Though IRAs have lower contribution limits than k s, you can still amass a bundle of money by funding one consistently. That should, in turn, allow you to supplement your Social Security benefits nicely.
As helpful as Social Security may be, it shouldn't be an income source you depend on in the absence of other options. The sooner you realize that, the sooner you can start building savings that make it possible to enjoy retirement to the fullest.
Discounted offers are only available to new members. Stock Advisor will renew at the then current list price. Investing Best Accounts.
0コメント