4 Questions to Ask Yourself as You Plan for Retirement
Reading Time: 3 MinutesLast Updated: November 3, 2023
Deciding when to start receiving your retirement benefits from Social Security is a decision that only you can make, and you should make that decision with as much information as possible. There are a lot of important questions to answer.
Should you claim benefits earlier and get a smaller monthly payment for more years? Or should you wait and get a bigger monthly amount over a shorter period?
There are no right or wrong answers, but we encourage you to consider these four important questions as you plan for your financially secure retirement:
How much money will I need to live comfortably in retirement?
Anticipate what your expenses will be in retirement, including things like mortgage payments or rent, utilities, healthcare insurance and related costs, food, personal care, car payments and maintenance, entertainment, hobbies, travel, and credit card or other debt. Also, consider whether you’ll need to provide for your spouse, children, or grandchildren.
What will my monthly Social Security retirement benefit be?
The average monthly Social Security benefit for a retired worker in 2018 is $1,404 (up from $1,377 in 2017). The average monthly Social Security benefit for a disabled worker in 2018 is $1,197 (up from $1,173 in 2017). As a reminder, eligibility for retirement benefits still requires 40 credits (usually about 10 years of work). The Social Security Act details how the annual Cost of Living Adjustment (COLA) is calculated. You can read more about the COLA on our website. The best way to get an estimate of your retirement benefit is with a personal my Social Security account. Get yours today.
Will I have other income to supplement my Social Security benefits?
Secure your financial future with a retirement portfolio that includes savings, investments, and possibly a pension plan. If you’re willing and able, you may choose to increase your income by working past retirement age. Social Security replaces a percentage of a worker’s pre-retirement income based on your lifetime earnings. The amount of your average wages that Social Security retirement benefits replaces varies depending on your earnings and when you choose to start benefits. If you start benefits at age 67, this percentage ranges from as much as 75 percent for very low earners, to about 40 percent for medium earners, to about 27 percent for high earners. If you start benefits after age 67, these percentages would be higher. If you start benefits earlier, these percentages would be lower. Most financial advisers say you will need about 70 percent of pre-retirement income to live comfortably in retirement, including your Social Security benefits, investments, and other savings.
How long do I expect my retirement to last?
Anticipate the length of your retirement, keeping in mind that many American workers will live much longer than the “average” retiree. Consider your health, family longevity, and lifestyle. Your Social Security retirement benefits will provide continuous income for as long as you live, protecting you even if your other sources of income run out. Discover your life expectancy with our online calculator.
No one can predict the future perfectly, but careful planning and preparation will help you to make a well-informed decision about when to start receiving your Social Security benefits.
If you’ve contributed enough to the Social Security system through FICA payroll taxes, you can receive your full retirement benefit at age 66 or 67 depending on when you were born. You may also claim it sooner, starting at age 62, at a permanently reduced rate. Or you may wait until after your full retirement age, increasing your benefit amount by up to 8 percent per full year to age 70.
Social Security is with you through life’s journey, and we’re here to help you prepare for a financially secure future for you and your family. We invite you to use our online retirement planners.
To learn more about all of our programs, please visit us.
Join us on Facebook Live with USAgov on 1/30 at 7 P.M. ET as we chat about retirement.
Note: The closed captioned version will be available within one week after the broadcast.
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Tags: retirement, retirement benefits, Social Security benefits
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Jim Borland, Acting Deputy Commissioner for Communications
Jim Borland, Acting Deputy Commissioner for Communications
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Ofelia M.
Confused about statement that you do better retiring at 67 my DOB is 9/5/52 had been tol 66?? When must I apply 3 mos before Sept or if I want to wait to finish colander year 3 mos before that I am obviously still working full time
Jaime G.
Tengo algunas preguntas por hacer acerca de mi retito
R.F.
For information in Spanish, please visit us at http://www.segurosocial.gov or http://www.facebook.com/segurosocial.
For Social Security information in other languages, please visit us at http://www.socialsecurity.gov/multilanguage. Thanks!
Scott W.
If I am making less money the last 10 years I work i.e. from age 55 to 65 I’ll make about $45000 a year , from age 35 to 55 — I averaged about 60,000. Does the money I’m making now decrease my Social Security benefit? Another way I can ask this question is according to my social security statement I should get about $1800, at age 65 if I continue to work at $45,000 a Year, for the next 10 years until I retire, can that $1800 decrease?
R.F.
Thank you for your question, Scott. When you apply for retirement benefits, we base your benefit payment on your highest 35 years of earnings and your age when you start receiving benefits. Higher lifetime earnings result in higher benefits. If there were some years you didn’t work or had low earnings, your benefit amount may be lower than if you had worked steadily. Our Retirement Estimator gives you future estimates of your monthly Social Security benefits based on your actual Social Security earnings record. In addition, we have a variety of other calculators to help you plan for the future.
You can create a my Social Security account, with your personal my Social Security account, you can verify your earnings, get your Social Security Statement, and much more.
In April we celebrate “National Social Security Month“, see what you can do online at http://www.SocialSecurity.gov. Happy planning!
See our Retirement Planner page for more information.
Joni
My husband died in 2005. I have read that I can receive widow’s benefits when I turn 60 (now 58 1/2). How do I determine the amount of these benefits? Will these benefits be reduced if I continue to work? Thank you.
David R.
Hi, I’m 64 and receive disability checks. How would that effect my s.s. benefits if I retire at 65? What should I do to receive the most out of my s.s. benefits? How long can I collect disability before I have to retire and start collecting my s.s. benefits. Would the amount I receive change? Thank you
Audrey J.
If I receive spousal benefits at age 62 will I receive Medicare at 65?
Joseph P.
Here’s a whopper!
Mr. Fernandez, can you please explain this rationale to me and to everyone? Why do blind people, who never workd a day in their life, get a whole lot bigger social security checks than those, who workd all their life and contributed into social security? Not only blind people get a much bigger social security check, but the rules and regulations are more favorable to them as well. I don’t it’s fair for someone, who worked all their life contributed into social security, to get, for example $900 a month and the blind person, who never worked a day in life to get $1250 a month just for being blind. Where’s the fairness and justice?
R.F.
Thank you for your question, Joseph. We pay disability benefits through two programs: the Social Security Disability Insurance (SSDI) and the Supplemental Security Income (SSI).
Disability benefits are paid to people who are unable to work because of a medical condition that is expected to last one year or more or to result in death. Social Security pays only for total disability — no benefits are payable for partial disability or short-term disability.
To receive disability benefits under the SSDI program a person must be insured, which means they worked and paid into Social Security for a required number of years prior to becoming disabled. There are many blind people that work and eventually attain insured status and become eligible to receive disability benefits. We do not base your Social Security benefit amount on the severity of your disability. We base it on your average lifetime earnings before your disability began.
The SSI program in the other hand, is a needs-based program that pays benefits to disabled adults and children who have limited income and resources. A blind person with limited income and resources –that never worked- will likely qualify for SSI benefits. In 2018, the SSI monthly payment for an individual is $$750. Some states provide supplement payments to SSI recipients. The amount of these payments vary from state-to-state and reflect differences in regional living costs.
We hope this information helps to clarify. Thanks!
Laurie G.
Why isn’t there a beneficiary for Social Security listed when a recipient dies and has no dependents. You loose all your hard work earnings. It is not fair.
Paul F.
This newsletter is a great idea.
Gary S.
How much taxes should I be withholding each month because with other pensions I am having to pay taxes at the end of the year.