| Baby boomers will be retiring by the millions over | | | | to Social Security and therefore may not be |
| the next two decades, which leaves many of | | | | eligible for benefits). |
| them wondering about Social Security. They | | | | Generally, your top 35 years of earnings are |
| have concerns such as... | | | | averaged (and indexed for inflation) to calculate |
| Will Social Security go "bust" before I can collect | | | | your retirement benefits. The formula is more |
| my retirement benefits? | | | | complex than that, but that's the basic premise. |
| For decades the media has been telling us that | | | | Once your benefit is calculated, it is reduced by up |
| Social Security is going broke. Millions of Americans | | | | to 25% for people who retire before they reach |
| are counting on Social Security to help pay for | | | | full retirement age, and increased by 8% per year |
| living expenses during retirement, so this is | | | | for people who wait until after they reach full |
| obviously a great fear. Is there any truth to the | | | | retirement age to start collecting benefits. |
| warnings about Social Security going under? | | | | To estimate your benefits, you can use the |
| The 2009 Social Security Trustees Report | | | | retirement benefit calculators at the IRS website. |
| forecasts that Social Security benefits paid to | | | | When should I apply for Social Security? |
| retirees will exceed Social Security taxes paid in | | | | The question that most people ask first regarding |
| by workers (and earnings on the funds in the | | | | Social Security is "when should I start collecting |
| trust) beginning in 2016. In addition, the trust | | | | benefits?" By now, you're aware that you will |
| fund could be drawn down by 2037. | | | | receive lower benefits if you apply for Social |
| Most likely we will see reforms such as raising the | | | | Security before your full retirement age. The |
| retirement age, raising the wage limit that Social | | | | question is, are you better off applying early and |
| Security taxes are paid on, and lower benefits for | | | | receiving benefits for more years, or are you |
| future retirees (it's less likely that people already | | | | better off waiting until age 66 or later to apply? |
| collecting benefits will see their benefits decreased. | | | | How can I maximize my retirement benefits? |
| How much can I expect to receive? | | | | Your parents and grandparents probably never |
| It's essential to know how much income you will | | | | considered how they could maximize their Social |
| have from different sources, including Social | | | | Security income, but you should. Because it's a |
| Security, after you retire. For some people Social | | | | lifetime income, and because it is increased each |
| Security is their only retirement income; for | | | | year for inflation, Social Security is much more |
| others it's a small part of their retirement, as they | | | | valuable than most people understand. There is |
| will have pensions and investment income in | | | | nothing wrong with using the Social Security rules |
| addition to Social Security. Whatever your | | | | to your advantage. |
| situation is, you need to have a good | | | | Will Social Security be enough? |
| understanding of how much income you will | | | | The purpose of Social Security was never to |
| receive from all sources so you can adequately | | | | support someone completely during retirement. It |
| plan for your retirement years. | | | | was created to supplement other income sources |
| Your retirement benefits will vary based on a | | | | (pensions and annuities) as well as your retirement |
| number of factors, such as the age you retire, | | | | portfolio. So you should not expect Social |
| how much you earned during your working years, | | | | Security to fund your entire retirement. For the |
| and how much you contributed to Social Security | | | | average person, Social Security makes up about |
| (some government employees do not contribute | | | | 40% of income received during retirement. |