Social Security retirement benefit is a kind of support for American retirees. It is not supposed to be the main income of your retirement. Thus, it is more than likely that the amount of money you get is not enough to make ends meet. Needless to say that there will be exceptions. There are might be some former workers who earned a lot of money for 35 years and have a large cheque.
If they have gotten rid of their mortgage and have no other debt or personal loans, they might have enough with their Social Security benefit. Of course, as long as their lifestyle is not a very expensive one. Another thing to take into account is the fact that relying on just a source of income is not sensible. What if the Social Security system starts to fail? This system or any other could go wrong, so diversification will allow you to have a continuous cash flow.
What was the official poverty line in 2022?
As for a person that lived on their own the official poverty line was just 1,132 dollars per month in 2022. The average Social Security retirement benefit was 1,656.30 dollars in 2022. Therefore, it is not far from the poverty line. It will depend on the expenses every person has. As you can see, it is not a lot of money to live off that.
Thus, it is of vital importance that you really work out if you can survive on the income you will have during retirement. Social Security allows you to keep working until you are 70. In this way, you can increase your cheque by a staggering 24%. Ask some retirees you may know if a 24% extra would come in handy now. Inflation and the skyrocketing cost of living are a great burden.
Is the purchasing power of Social Security benefits enough the first year you retire?
For some retirees, SSA benefits are not enough even if they have just retired. This purchasing power will probably keep falling. Despite the fact that SSA tries to increase its retirement benefits with the annual COLA, it may not be enough. As you may have realized, it is essential that you start saving early and making contributions to your savings plan.
Taking advantage of all the good things 401(k) plans may boost your retirement nest egg. Other people also like to buy a property to rent and make some extra cash. Some prefer to invest and make their money on the stock exchange. For all these reasons, you had better not rely on just Social Security retirement benefits.