It’s never too early to start planning for retirement. The earlier you start thinking about it, the better off you’ll be when you reach retirement age. In planning your retirement, you’re bound to talk about social security, and it’s up to you to decide whether you’ll use those benefits to fund your retired years.
As long as you’ve paid into the program for at least 10 years and are at least 62 years old, you qualify for social security payments. According to the Social Security Administration, the monthly maximum amount for 2022 is $841 for an individual and $1,261 for an eligible couple. This is a 5.9% increase from 2021 payments. Depending on your situation, you may be able to fully depend on monthly social security payments to pay for your retirement, but most Americans don’t seem to be leaning that way.
A recent GoBankingRates survey found that 71% of Americans are not planning to fully fund their retirement with social security. 45% plan to partially rely on social security payments, 16% don’t believe there will be any money left for them, and 11% don’t believe they’ll qualify for it at all. So if Americans aren’t planning to use social security benefits to cover their retirement, what are they planning to do?
You Can Earn More with Retirement Accounts
Rather than rely on benefits that frequently change year to year, invest some of your money in a retirement plan. Whether that’s a traditional/roth IRA or an employer-provided 401(k), contributing money to these accounts and allowing it to accrue over time will result in a much larger payout than can be expected from social security.
If you don’t have savings yet, don’t worry! 23% of Americans are in the same boat as you. And you can start a retirement savings account online today. Any money that you’re able to save before you retire will make actually retiring that much easier.
You Can Keep Working
People are living longer, and it seems that our knowledge of healthcare is only improving. Nowadays, it’s not unexpected for adults to work past age 65. If you decide to continue working as you get older, you won’t have to wait on social security payments. With an income, retirees are able to do more and save more.
According to the same survey mentioned above, 52% of Americans believe they’ll either retire past 65 years old or won’t be able to retire at all. This means more Americans in the workforce later in life.
You don’t have to work full-time. Many retirees are opting for side gigs and part-time jobs so that they still have time to enjoy their retirement.
You Can Consider Relocating
Some cities have a cheaper cost of living than others. It’s important to consider not only when you retire, but where. If you’re able to retire somewhere where your nest egg or paycheck will stretch farther, it might be worth it to make the move. There are a number of great cities where you can retire on a budget of only $1,500. On the other hand, you can also find areas to avoid where the cost of living is too expensive. Do your research, and talk to a financial advisor. And note that state taxes can have a larger impact on your bank account than you might expect.
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This article originally appeared on GOBankingRates.com: Social Security: Why You Don’t Have To Entirely Depend on It, Even With No Savings