Are you hoping for a secure financial retirement or are you planning for one?
Whether on your own or with professional guidance, planning for retirement is important. Your financial independence depends on you.
Years ago I was one of several speakers at a retirement planning seminar and heard another speaker mention that he was often asked when a person should start financially planning for retirement. He said his answer was always “five years ago, but at least today.”
Independence Day is tomorrow. Plan today to review your personal plans for retirement financial independence before the picnic, parade or family gathering. Then do it.
Include Social Security retirement benefits as part of your planning, but realize that Social Security was never intended to provide full retirement income. Under current law, if you have average earnings, your Social Security retirement benefits will replace about 40 percent of your pre-retirement earnings. The percentage is lower for people in the upper income brackets and higher for people with low incomes. Financial planners suggest you have in the area of 70-80 percent of pre-retirement earnings for a comfortable retirement.
As of May 2013, the average Social Security retirement amount was $1,267 per month to the individual worker, excluding any related family benefits. If starting SSA retirement in 2013, exactly at full retirement age and with maximum taxable earnings over your entire career, the highest Social Security retirement amount is $2,533 per month. There is a wide range to amounts.
How much will your Social Security retirement amount be? Estimate it and learn more using the SSA retirement planner at http://www.socialsecurity.gov/retire2/. In particular, use the Retirement Estimator for an estimate based on your actual work record. Combined with this, many other calculators are available, including one to compute the effect of early or delayed retirement compared to your full retirement age (FRA).
Social Security should be just one part of your retirement planning. Reach non-SSA financial planning websites through the retirement planner section.
One of these is the Employee Benefit Research Institute / American Savings Education Council “Choose to Save” website, www.choosetosave.org/. Use the “Ballpark E$timate” there, an easy to use interactive tool to help you identify about how much you need to fund a comfortable retirement. The “Ballpark E$timate” takes issues like projected Social Security benefits and earnings assumptions on savings, and turns them into easy to understand results.
Are you hoping for a secure financial retirement or are you planning for one? Your financial independence depends on you. I hope you are planning, if not five years ago, then today.
Happy Independence Day.