Social Security forms the foundation upon which Americans build their retirement plans. Because of this key role the program plays it is critical for all Americans to understand how Social Security works.
According to research by the Insured Retirement Institute, 46 percent of Baby Boomers expect Social Security to be a minor source of income in retirement. Yet the Employee Benefit Research Institute (EBRI) has found that four-fifths of retirees age 65 and over receive 45 percent or more of their income from Social Security. Also, more and more Boomers are planning on working in retirement, 79 percent in 2013, up 12 percentage points from 2011, according to IRI research. Considering these two statistics, it is likely that Social Security will play a larger role in Boomers’ retirements than they expect, and that to make up for any income shortfall, more Boomers plan to work.
By understanding how much you are currently projected to receive from Social Security under current law, you can begin to put together a sound retirement plan, and identify additional retirement income sources to supplement your Social Security benefits. When you chose to retire and start to collect Social Security benefits has a big impact on the amount you will receive.
The Basics of Social Security Fact Sheet provides a starting point for a conversation with your financial advisor on when is the best time for you to retire.
Click here to download a PDF copy of the Basics of Social Security Fact Sheet.