One of the big concerns among people in the United States is retirement money. The Social Security Administration is responsible for sending a benefit every month to its beneficiaries, but it may not be enough. Savings play a key role in the retirement of American workers, because without savings it is difficult to maintain a good standard of living. Social Security is key to retirement, but it is necessary for the worker to supplement it with money saved.
So, even if the retirement payout is high, we can get into trouble if it is not enough to pay all the monthly expenses. The COLA doesn’t increase enough year after year and retirees see their Social Security benefit stagnate, forcing them to find all sorts of tricks to live on retirement alone. The point is that we need to save, but the other question is how much money do we need to save before retirement.
Saving money before Social Security retirement
Each person will need a different amount of money depending on the type of life they lead. Social Security can’t bring big luxuries to retired life, although it can pay the bills. At least most of the bills. With this in mind we need to think about what we want to do before we start thinking about how much money we need to save.
If your home will be paid for by the time you retire, so much the better. This will mean that you won’t need to pay rent or mortgage with your Social Security. In this sense, other items such as a car or college credit should be paid off before retirement begins. This way, you won’t need to save more money than is mandatory for electricity and gas bills, plus money for medical and food.
There is no such thing as the perfect amount of savings
Although the more money saved is obviously better for us, there is no exact amount that is better than another. You have to see what your spending will be in the future. With inflation it is more difficult to know, but it is possible if we make a calculation and add an extra 10% at the end of the operation so that we don’t end up with less money than we need. That is how you can live with Social Security in a safer way.
In any case, remember that it is always a good idea to set aside 6% of your salary every month for savings. This will ensure that when you start collecting Social Security, you will have enough money to be able to live in a calm, peaceful and worry-free way.