Social Security is an important source of retirement income,
but it shouldn't be the only thing you rely on in your later years. In fact,
there are numerous downsides to trying to survive as a senior on these
retirement benefits alone.
Wondering why having supplementary income is so important?
Here are four big reasons you absolutely don't want to make Social Security
your only source of support.
1. You won't have very much money
The average Social Security benefit in 2021 is just $1,543
per month. If it doesn't sound like a lot, that's because it isn't. In fact,
your household income will be just above the federal poverty level.
While this may come as a surprise, it's not actually a
glitch in the system. Social Security wasn't ever meant to be the only money
These benefits replace around 40% of pre-retirement income
because they were designed to be part of a "three-legged stool" of
support. The other two legs include a pension and retirement savings. But since
most people don't get pensions from their jobs anymore, savings have to pick up
2. Your buying power will probably fall over time
Benefits rise in most years, as there are annual
cost-of-living adjustments built into the Social Security program. They're
supposed to help benefits keep up with inflation. Unfortunately, research has
shown these raises aren't enough to keep pace with price increases in the
actual goods and services that seniors need. As a result, true buying power has
fallen 30% during the past two decades.
This trend will most likely continue. As you get older,
checks that were already too small to fund a comfortable lifestyle will be worth
even less in real terms. You could find yourself with significant financial
shortfalls late in life unless you have a retirement savings account to fall
3. Your retirement security will depend on the government
Social Security isn't going to go bankrupt, and it's
unlikely the government will make major changes to it anytime soon.
But the program is facing some financial trouble. And
certain approaches to shoring it up, such as raising the full retirement age,
could mean it provides less money in the future.
The bottom line is, the size of your benefit checks largely
depends on the government not changing the rules in a way that causes you to
get less money. Do you want to bank your financial security in retirement on
politicians always doing the right thing?
4. You may have to wait to retire
Social Security retirement benefits don't become available
until age 62. As a result, retiring before that age won't be an option if
you're planning on relying on these benefits. Furthermore, you'll have to wait
until your full retirement age to get your full standard benefit. Or you'll
need to wait even longer -- until age 70 -- to maximize the size of your
If you don't want to get stuck staying in the workforce
longer than planned solely for the purpose of supersizing Social Security
checks you'll have to depend on, make sure you have other money set aside to
The $16,728 Social Security bonus most retirees completely
If you're like most Americans, you're a few years (or more)
behind on your retirement savings. But a handful of little-known "Social
Security secrets" could help ensure a boost in your retirement income. For
example: one easy trick could pay you as much as $16,728 more... each year!
Once you learn how to maximize your Social Security benefits, we think you
could retire confidently with the peace of mind we're all after
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