Preparing a Crucial Social Security Action is Imperative for All Before 2025
Numerous retirees would face challenges surviving without Social Security, as the majority of elderly individuals largely count on these benefits to cover their expenses. According to a 2024 Gallup survey, 60% of current retirees consider Social Security as their primary income source, while 28% view it as a secondary one. Furthermore, a different survey conducted by the Nationwide Retirement Institute indicated that roughly 20% of American adults have no other retirement income aside from their Social Security benefits.
Regardless of your age in retirement planning, it's pivotal to prepare as much as possible to maximize the benefits of Social Security during your retirement. One straightforward action that everyone, regardless of age, should implement at this very moment is to verify their projected benefit amount.
No matter where you stand in your retirement planning, one of the most straightforward and crucial steps you should take is to check your estimated benefit amount.
No matter your point of departure in your retirement planning, one of the easiest and crucial steps to take consists of checking your estimated benefit amount.
Once you meet the eligibility criteria for retirement benefits (usually after working full-time for ten years), you will begin receiving estimates of your future payments based on your actual income records. To access your estimate, create or log in to your mySocialSecurity account online. From there, you can examine your benefit statements.
The base benefit amount shown on your statement corresponds to the amount that will be paid out to you at your retirement age (RA) - a period that varies between ages 66 and 67 depending on your birth year. However, you should also see an estimate of how your benefit will differ if you file before or after your RA.
Understanding the amount you can expect to receive in benefits is essential, as it will guide the proportion of your retirement income that needs to come from other sources, such as savings.
It's also important to note that your benefit may change over time - particularly if your income undergoes substantial shifts between now and retirement. Regularly checking your estimated benefit will help you plan your financial future more accurately.
The reliability of Social Security as a source of income is contingent upon the program continuing to function by the time you retire. Approximately half of non-retired adults believe that Social Security will fail to provide them with a benefit when they reach retirement age, according to a 2023 Gallup poll.
Currently, Social Security's primary concern is its cash shortage. The program has been paying out more in benefits than it's receiving in income, leading to a deficit. To bridge the gap and avoid immediate cuts, the Social Security Administration has been withdrawing funds from its trust funds. However, these funds are expected to deplete by 2035.
Lawmakers should ideally come up with a solution to avoid depleting the trust funds entirely before 2035. Even if the funds run out, Social Security income from payroll taxes and other sources is projected to sustain around 83% of scheduled benefits, according to the Social Security Administration Board of Trustees' latest estimates.
As much uncertainty exists between now and 2035, it's uncertain what Social Security will look like in the coming years. However, even if the trust funds run out, the program is not bankrupt. It is still a good idea to plan for potential benefit cuts, as anything could happen before 2035.
Start saving as much as possible in your personal savings to minimize the impact of Social Security uncertainties on your retirement. Social Security is a key component in most people's retirements, and understanding your potential benefit can make retirement planning more manageable. By regularly checking your estimate, you can take the necessary steps to set yourself up for a financially secure retirement.
To ensure a financially secure retirement, it's crucial to save as much as possible in your personal savings, as the reliability of Social Security as a primary income source during retirement is uncertain. Furthermore, as retirees largely depend on Social Security benefits to cover their expenses, maximizing these benefits by checking your estimated benefit amount is an essential part of retirement planning.
