In these current times when the United States economy is having such a turbulent and strange time, Social Security is a lifeline for many citizens. However, for a large portion of Americans, Social Security checks do not provide enough money to live on every month.
And that’s why many experts recommend not relying on the Social Security check as the sole source of income. While it’s true that we can live in some cities on just the retirement check, it’s not recommended. We may find ourselves in financial trouble if we make this decision.
Why is it not a good idea to have Social Security as the only source of income?
The first thing we need to keep in mind in order to understand that cashing only the Social Security check is the amount of the check. Our Social Security checks are always going to be less than our salary as workers. This is because the check comes directly out of the taxes we have paid.
The retirement check is calculated by three fundamental elements. These elements are retirement age, salary as a worker and years worked. Even if we maximize all of those, the end result could be $4,558 per month in this year 2023. Every year the maximum increases because of the COLA, but currently that’s the biggest check.
We’re talking about that being the biggest check, maximizing all aspects. So someone with an average salary who hasn’t managed to work for 35 years would not be able to get a cheque that high.
And that’s why it’s not advisable to have Social Security as the only source of income. We must find another way to earn extra money, either with a business that generates passive income or by selling things we no longer need.
What can I do if I only collect retirement?
In the event that you are currently only collecting your Social Security retirement check, there are a few things you can do to help you live better every month. Among them, we find the following:
- Create a monthly budget.
- Eliminate unnecessary expenses.
- Save as much as possible every month.
And remember that after you retire you can continue working, although that may take away part of your retirement check.