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The Danger of Overestimating Social Security Payments
On a recent plane ride, I overheard a woman say that her sister was comfortable financially and could retire but she’s going to work another 10 years just to maximize the amount of Social Security she will receive. The woman indicated it would be about $90,000 per year. I was shocked that someone thought that Social Security benefits were that high. In reality, $30,000 would be the upper end of the approximate benefit for a high-wage earner who retires at age 65. But maybe the misconception explains why too many people are complacent about saving and investing–because they have irrational expectations that Social Security will provide them with a comfortable retirement. Read More…