Today’s employees have plenty of distinct views on how social security fits into their plans for pension. Some think for them at all it won’t be there, which is untrue. But it’s more troubling that some believe they can rely on it to deliver most or all of their pension revenue.
Overestimating your advantage from social security could lead to hazardous underestimations of how much personal savings you need to accumulate. This error is more prevalent than you believe.
According to a latest nationwide study, Americans overestimate the average social security advantage by 28 percent, and an alarming 26 percent of those interviewed think they could live comfortably on social security alone. But for a rude awakening, they’re in.
Nationwide’s surveyed employees estimated that they would receive $1,805 per month from social care, which is $21,660 per year. But present retirees earn only $1,408 a month on average, or $16,896 a year. That’s an annual difference of $4,764 or more than $95,000 over a 20-year pension period.
If you’re like most Americans, you’re on your retirement savings for a few years (or more). But a couple of unknown secrets might assist make your pension revenue increase.
Social care is an important part of your retirement plan, but in the long run it could cost you to overestimate its value. If you haven’t already done so, take the time to figure out how much social security can reasonably expect and make any necessary adjustments to your retirement plan to keep you on track.