I went to a presentation on Social Security strategies last night. The speaker told us that the program is "fully funded" for the next twenty years. That is good news for those of us who are currently collecting and do not plan to live for more than twenty years. I am not in that category. I was born in 1960. People born in that year later years do not get to collect their full retirement until age 67. Anyone can begin collecting benefits at age 62, but if you do that you lock in a reduced monthly benefit for your entire life. If you wait to begin collecting benefits until age 70, you get a nice little "bonus" for waiting.
One statistic that I heard last night startled me and made me feel sad: for those who are currently collecting benefits, the benefits on average make up 53% of their total income. That seems really high to me. Apparently, to the greatest extent in almost 80 years, retired people are truly living on Social Security. I feel for these people. Even if your benefit is $2,000 month (and this is an above average benefit), you are looking at $24,000 per year. If that is 53%?of your total income then you are living on $46,000 per year. Given the cost of living these days, that is not a lot.
So when I talk with people in their 20's and 30's I always urge them to save and invest-- even if they have to curtail spending and defer gratification. Most of these folks believe that Social Security will either 1. Not be around when they reach retirement age OR 2. That Congress will raise the full retirement age to 75 for people in their generation. You don't win popularity contests when you advise people to save and live below their means. But for people in Generation Y and younger generations they may not have any choice.
You can find out where you stand in terms of benefits by going to www.ssa.gov OR www.socialsecurity.gov
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