For some United States citizens, thinking about paying into Social Security is a long way off. Despite this, the issue is much more important than it seems, because through retirement we can pay the bills and live comfortably. This happens if we plan ahead so that we can have the highest possible benefit.
Otherwise we may have problems living comfortably and paying taxes if we are obligated to do so. The Social Security pension is a benefit for retirees and not the sole cash income to live on month to month.
Therefore, it is a good idea not to rely solely on our Social Security. We should always have alternative sources of income so that we do not lose our purchasing power. Unfortunately, most retirees do not have this opportunity, as it requires prior preparation that not all people are aware of. For that reason it is much better to have passive sources of income to benefit every month.
How much Social Security money will you need?
According to the experts at Madison, the Social Security benefit is only 40% of a worker’s regular income. This means that when we work we collect 60% more money compared to retirement. This is very bad news for many people, especially if there is no good pension plan behind it.
In order to be able to live with peace of mind, it is necessary to increase that 40% to at least 70%. Thus, if you earn around $2,000 while working, you have to try to get a benefit of around $1,400. This is not at all difficult if you know how to do it and if you know how to increase your Social Security as much as you can.
What if my retirement payout is not very high?
To achieve a high retirement we have to take into account three different factors, although they are all related. Your monthly Social Security payment depends on your retirement age, your years worked and your salary as a worker. If you maximize these three factors your Social Security benefit will be much higher.
The minimum retirement age is 62, except in the case of people with disabilities. By applying for retirement at that age you only get 70% of your Social Security money. To receive 100% of the money contributed, it is necessary to wait until the age of 67. On the other hand, it is mandatory to work at least 10 years to start receiving the pension, but it is advisable to work 35 years (with a good salary, so it will be higher) to have a high benefit.
In case your retirement is not very high you have to look for other sources of income. You can sublet a room in your house or save money on food so that you can pay all your bills without any kind of problem. Any act that benefits you to save money from Social Security is good to be able to live with peace of mind.