A resident of the United States who meets the requirements established by the Social Security Administration can receive a monthly retirement check. Meeting the minimum requirements for this benefit is relatively easy for all Americans. Still, having a good retirement with just a Social Security check can be difficult. It all depends on the individual, but in general it is difficult to have a good golden years on this monthly income alone.
Aside from the fact that we should maximize our check to have the best possible retirement there are several things we can do. If what we are looking for is to have a good retirement it is mandatory to have a good check, not to have debts and to save a lot of money. This will at least ensure that we will have a good time while collecting Social Security.
But this does not assure us to have the best possible options. Cashing just a check as the only source of income is a bit reckless. There are several reasons for this, three of which stand out. So, let’s take a look at these important reasons not to rely on the Social Security check as the only source of income when retirement comes.
Reasons not to cash your Social Security check only
There are obviously more reasons why we shouldn’t cash the Social Security check alone. Still, these three reasons are very important. After looking at them, I’m sure you’ll think of a few more for your own case. But these three we are going to look at are general and many Americans will agree that they are important.
Social Security is less than the salary
The standard of living while earning a worker’s salary is usually high. This cannot be maintained when we collect only a Social Security check. It is as simple as that we will always receive less money from the retirement benefit than from the salary.
So if you are thinking about maintaining the same lifestyle and collecting only the benefit you should know that it is very difficult. You can do things like saving while working or investing in businesses when you retire. But what is certain is that maintaining the same pace of life with just your retirement check is impossible for most people.
Inflation increases every year
Although the COLA seeks to make the Social Security check match inflation it doesn’t always do so. In addition, the COLA increases benefits based on the previous year’s inflation. For that reason in most years it is insufficient.
Each year our purchasing power will go lower and lower. For that reason, having only the retirement check with the current inflation can make it unfeasible to live quietly and without financial hardship.
Unforeseen expenses
If we have every dollar counted, we may have problems in the future. Unforeseen expenses can always arise that make the Social Security check insufficient for our living. So try to have an alternative source of income to avoid problems.
For this we can always have emergency savings, as well as some business to help us financially. Any other source of income should be welcome in these cases.