As retirement nears, some people find themselves in a panic. They haven’t saved for retirement at all, and they’re counting on Social Security to provide for their living expenses once they stop working. Others may be forced to stop working before they were ready, and find themselves depending solely upon Social Security. And some people actually have managed to save for retirement, but are considering draining their retirement funds to pay for a child’s college tuition or a home – in most cases is a huge mistake.
One way or another, many Americans find themselves wondering if they could live off of Social Security. In fact, 32 percent of Americans aged 65 and older are forced to do just that. According to the Social Security Administration, 34 percent of Americans currently have no retirement savings,and 51 percent of the population can’t count on a pension from their employers.
Depending upon whether you’re married, taking this route means you would have to live off of $15,000 to $30,000 annually. The average Social Security beneficiary in 2014 received about $1,300 per month. Ask yourself if that income would cover your rent or house payment, food, utilities, gas, and medical expenses. In most cases, the answer is no.
That’s why saving for retirement – even if you can’t afford to save much – is essential to ensuring you will be able to cover your living expenses when you stop working. Keep in mind that even small contributions to a retirement fund can earn compounding interest over time. You may find it necessary to make small sacrifices now, in order to ensure peace of mind later.
Talk to a financial advisor about your concerns and your budget, and he or she can point you in the right direction. Generally speaking, it’s never a good idea to rely solely upon Social Security. View your benefits as a supplement instead, and start planning now for a healthier retirement.
14103 – 2015/2/13