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Retirement Planning 101: Look Beyond Social Security - The Motley Fool
For anyone working on their retirement plans–and that should include anyone not yet retired–the Social Security Administration (SSA) website offers sage advice: Social Security is not meant to be your only source of income in retirement. “On average, Social Security will replace about 40% of your annual pre-retirement earnings, although this can vary based on your circumstances. Your full retirement age is 67. Starting retirement benefits before your full retirement age (as early as age 62) lowers this percentage and starting benefits after your full retirement age (up to age 70) increases it.”
For this basic reason, it is critical to understand that planning finances for post-employment years must consider other compensating revenue sources to account for the remaining 60% of pre-retirement earnings. Yes, some expenses in retirement may be lower, but others (think medical costs, for example) will likely be higher. The Motley Fool contributing writer Maurie Backman offers commentary on this point in a recent post on their website…check it out here…