Retirement planning is the first step when you are making preparations for the eventualities of aging. These days, retirement is not a given. For most people, it takes careful planning to accumulate the necessary resources.
Far too many people do not take the right steps along the way, because they expect too much from Social Security. It is true that most people will qualify for Social Security. You gain eligibility through the accrual of retirement credits. Once you have 40 credits, you will qualify when you reach the age of eligibility.
During 2015, you get one credit for every $1220 that you earn, and you can accumulate a maximum of four credits per year. As you can see, the requirements are modest, so most people who work for a reasonable period of time will qualify for Social Security.
Your benefit will be calculated based on your 35 highest earning years. You can begin to receive an early benefit when you are as young as 62, but the benefit would be reduced. The exact amount of the reduction would depend upon the year of your birth, but it would be somewhere between 30 and 35 percent.
Your full eligibility age also depends upon your birth year. People born between 1943 and 1954 become eligible at the age of 66. The eligibility age then goes up by two months per year until 1960. The age of full eligibility for anyone born in 1960 or after is 67.
It is possible to get a larger benefit if you delay the submission of your application. You can earn delayed retirement credits until you reach the age of 70. Each year you delay, you would be increasing your benefit by eight percent when you do start to draw a direct deposit.
You can find out exactly how much you can expect to receive from Social Security if you register your account on the Social Security website. It is quite simple, and it only takes a few minutes. The Social Security Administration used to mail out paper statements, but this practice was discontinued a few years ago.
The average monthly Social Security benefit at the present time is just $1,328 for an individual, and this is really not going to allow you to cross many things off your bucket list. Even the maximum benefit of $2,663 is not exactly a king’s ransom.
Given these modest payouts, you should certainly be motivated to feather your nest in other ways as you look ahead toward your golden years and the twilight years that will inevitably follow.
Retirement Planning Consultation
We would be glad to help if you would like to develop an effective long-term plan for aging. Our firm offers free consultations, and you can contact us through this page to request an appointment: Grand Forks ND Retirement Planning.