6/28/2011 5:34 PM ET|
How to retire on Social Security alone
Well, sure it's easier to stop working if you have a pension and a fat 401k, but millions of us don't. Here are 6 ways to stretch those checks.
Dan Curtis expects Social Security to be his largest source of retirement income. The 52-year-old patient advocate for a health insurance company has a few thousand dollars in a 401k, but he finds it difficult to save on a salary of $38,000 a year, before taxes, in Minneapolis. He is also paying off $20,000 in student loan debt and providing child support payments for his two children.
"My retirement future feels pretty uncertain," he says. "If I could make another $10,000 or $12,000 a year, I could probably put some money away."
While it's generally a good idea to supplement your Social Security income with a traditional pension or personal savings, millions of people count on Social Security as their primary source of retirement income. Just over a third (34%) of retirees age 65 and older got 90% or more of their retirement income from Social Security in 2008. And the majority of retirees age 65 and older (64%) get at least half of their retirement income in the form of a Social Security payment.
Getting by on Social Security alone or with a small amount of savings will generally require some cost-cutting. The average monthly Social Security check was $1,178.80 in March 2011. A dual-earner couple, each receiving the average benefit, would receive $28,291.20 annually, which would be adjusted each year for inflation. Here's a look at how you can retire when Social Security is your primary source of retirement income. (Use this MSN Money calculator to see if you're saving enough for retirement.)
1. Maximize your benefit. If Social Security is going to be your biggest source of retirement income, you want to boost your benefit as much as you can. Your highest 35 earnings years are factored into your Social Security payout. Getting raises, working a second part-time job or even delaying retirement could boost your benefits because higher-earning years later in your career will cancel out years in your teens or 20s when you didn't earn as much. Your payout also varies based on the date you sign up for benefits.
"If you can wait until your full retirement age rather than taking it at age 62, oftentimes, depending on your health and longevity, that is going to be much more advantageous," says Kathryn Nusbaum, a certified financial planner for Middle America Planning in Pittsburgh. Your payment will increase for each year you delay claiming between ages 62 and 70.
2. Test out a smaller budget. Get an estimate of how much your Social Security payments would be at the age you plan to retire, and practice living on that amount before you actually leave your job.
"The people who seem to weather it the best are those individuals who go into it intentionally understanding that they have to live within their means," says Nusbaum. "You will not be getting a new car or going on fancy trips, but maybe a trip to the Olive Garden with a coupon." To live on this new and likely smaller budget, you will need to eliminate as many expenses as possible, including your mortgage, car loans and credit card or other debt.
Some people also start gardens to reduce food costs, cancel unnecessary or duplicative TV and phone services, and begin to find low-cost or free entertainment. "Discretionary spending, like entertainment expenses, is going to need to be whittled as much as possible, so it's free concerts and the public library," says Jill Gianola, a certified financial planner and owner of Gianola Financial Planning in Springfield, Ohio. (How much will your 401k provide? Check MSN Money's calculator.)
3. Minimize your housing expenses. Paying off your mortgage eliminates one of your biggest expenses and will allow your limited budget to stretch further in retirement. You can also control your housing costs by downsizing to a smaller home or a less-expensive neighborhood and pocketing the price difference. In some cases, you can also lower your property taxes or maintenance expenses by moving to a smaller abode.
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Right, we must think about getting ill, disease and prevention plus all of the above. Now, tell me a single person we know that having taken all that care has not died sooner or later. Be it athletes, health gurus, MD's, etc. It does not matter how much money we can have or save, or politicians may shelter for us from taxes but none of will be left will go with us to the grave.
As for the financial security of our kids, none better than education, good values and having shared a good decent life with them. Being there when they needed us to be there. Enjoying life together, even within the limitations of a confined financial limitation.
No it is not "insurance" though that is what they fraudulently labeled it. True insurance is a contract and has to have real reserves or those managing it face prison.
You have a contractual right and can sue to enforce it when it comes to real insurance.
Most people have no idea what a complete fraud Social Security has been from the start!
One of the best books ever written about this criminal fraud was "The Social Security Swindle" by Irwin Schiff. He explained in this book how:
1. from the very beginning all "surplus payments" above and beyond the amount used to pay benefits, was spent and IOUs put in place of the money.....BY DESIGN....FROM DAY ONE!!
2. How Social Security was challenged in Court when first passed and the Supreme Court upheld the constitutionality of the system precisely because the government argued that there was NO connection between the amount paid in taxes and the amount (if any) paid in "benefits". In short the government argued that Social Security taxes were "true taxes and went into the general fund to be spent like any other revenue" and that the "benefits were appropriations like any other and not connected to the payroll taxes in any way. See there are constitutional restrictions against having a program directly tied to a tax.
3. In another case a person sued for benefits that they were somehow deemed not to be entitled to....and the Supreme Court ruled that no one has any "enforceable right" to Social Security. All anyone is "entitled to" is whatever the government is willing to give you at that moment, and you have no right to sue based on any argument that you have a contract with the government.
In short it was a fraud from day one....and the reason it "worked" is there were lots of people paying in for everyone sucking out. People had large families and didn't live as long as now.
It allowed government to act as Santa Claus for a couple of generations and skim off trillions of dollars to waste on all the things government wastes upon so well and they put "We owe We's" in place of any real resources....and the ONLY way anyone will get paid in the future is more taxes, more borrowing or more "printing" of increasingly worthless "money".
The sooner we quit kidding ourselves the better.
Incidentally, I am 51 and getting older by the minute and do not expect this fraud to exist in three years much less 15-16 when I theoretically could try to collect if I didn't mind stealing from the then current work-force including my own children.
I plan on working until I am absolutely unable to continue and hopefully will be able to live the last few years off of my own savings. This would be much easier if I didn't have to pay into this fraud and fantasy!!
This article is sadly humorous... "How to Survive on SS Alone..."
Do everything BUT- is the answer. What?
Borrow, go live with relatives, keep working... I thought the article was, "How to survive on SS alone?"
I'll bet not one single person up to now thought of ANY of those options!
(talk about self-gratification... do these pages not have an editor?)
You bring up another point about the current system and probsbly didn't realize it or don't care. The system as it is now, is really an insurance policy along with a retirement plan. Under a privatization plan, they might grant you early access to what money you've got in the system, but again once it's gone...that's it. At age 38 with a qualifying disability, it wouldn't be very long and you would be in REAL trouble.
Here is another "disabled" person who can read, write and type and operate a computer...and who probably drives....and instead of trying to do something to contribute to Society...instead takes disability at 38 years of age....and lives in the fantasy land that Socialist Insecurity will last as long as he does!
It is a Ponzi scheme....a chain letter that is running out of chain...and may not last another year or two (particularly if the rest of the world dumps the dollar) yet idiots of all ages really expect it will be there simply because they "NEED" it.
As the old saying goes..."people in hell need ice water"!
I know I will get blasted, but it is time to treat Socialist Insecurity as a welfare program...and means test and in addition kick everyone off of all other welfare programs including SSI unless they are proven to be truly mentally and physically handicapped to the point of helplessness!
Every penny people paid in to SS has been squandered as fast as it was paid in....and every penny anyone receives from the Feds was stolen from current workers, or put on our kids as future debt.
How dare we!! It is time for hard and painful choice and the longer we put it off the harder and more painful it will get.
There are millions of retirees that could get by with less and often thousands less. And no they would not be eating cat food.... more like eating at home and eating chicken and hamburger more often instead of steak and lobster. Many of these retirees are "double and triple dippers" and could live quite well with a dip or two less!
Then there are millions of just plain lazy people with no pride or sense of shame who could and would work if they were given no choice....but instead defraud a system that has virtually no checks and balances. Think not? Google " Adult Baby" and read about the fat lard-**** 35 and 350 lbs....and his "mother" at probably 450 lbs. He "feels more comfortable pretending to be a baby" and she pretends to be his "mother" and they both do it on SSI!!
Why should one penny of my money go for this kind of sick waste?
The parasites are going to overwhelm the "host" and then there will be true chaos.
Can one retire on social security income alone? That depends. If people were smart and bought a house that they could afford and paid it off before retirement, it is entirely possible. Buying and paying off a home is key. Most people will need to pay rent of $1,000-$1,500 or $12,000-$18,000 a year for housing. Imagine that money in your pocket instead.
Also, if you are educated and get a good job, you can rake in $40,000 a year as a couple for SS benefits- not too shabby without a mortgage payment- comes out to about $3200 a month. I'd say you can go to more than Olive Gardens with a coupon with that kind of money. Sure, you can't live high on the hog but you could certainly have an enjoyable retirement and travel from time to time.
For many moons I thought of returning to my country when I retired (@ 62) b/c I knew SS would not be sufficient to live here in the US. Things were very inexpensive even 5 yrs ago - I believe $800 would provide a good living. Well, here comes "International Living/K Peddicord", names Panama the best country to retire 4-5 yrs in a row, there's a major rush down; now for a decent house/neighborhood, I'm going to need @ least $1800/mo. Forget the condos: they're going for $200,000+. I've seen houses in millions; I was pleased when my country was named #1, but it's raised everything. I've had to scale down on my budget, & still haven't moved b/c of the costs. I was there for several months searching; I still plan on moving, it's just taking far more searching than I'd imagined. I will say, it's a beautiful place to be/visit: 2 oceans & the Caribbean Sea, etc. etc. They also now cater to foreigners. This article was a waste; I didn't enjoy the blogs; Thanks for posting.
Social Security needs to eliminate benefits to young wives/widows under age 62, with children. Payments for the children, but not the women. They can go to work like most American women. This started in the 1940s when most women did not work, and is outdated. Same for military wives.
The people in Wash DC now do not have the smarts, or the guts, to fix Soc Sec. It can be fixed. Soc Sec uses less than.01% for administrative purposes. They are continually short staffed and overloaded with work, thanks to the whim of each administration, Dem and Rep who make changes.
to: headin toSoAmerica, below, and others on disability, wthether SSI or SSA , you are to report any and all work to SSA. It is fraud not to, and they will eventually find out about your work. even in a foreign country. Do not defraud the system and become a burden on the tax system.
Soc Sec disability is earned through payroll taxes, SSI is not earned, it is for those who do not have enough work under SocSec(formerly welfare under state)
This article is meaningless and says nothing, whoever wrote it does not know about the real lives of average Americans.
bush's philosophy to privatize retirement and rid america of social security is an idea straight from the devil himself..
social security is the "only" means that ensures the working class and the elderly don't become homeless when they are kicked out into the street by greedy business's.
besides, moronic republicans don't understand that social security goes right back into the economy.
many business's, like walmart, mark their calendars for the days that social security checks and unemployment benefits are mailed and deposited because these are the days that sales go up.
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Joe Cantrell says he faces charges after trying to take advantage of the retailer's policy.