It is very important to be clear-eyed and practical about the future. Adopting a false sense of security because of the fact that you will be receiving Social Security benefits can be a big mistake. Social Security benefits are actually relatively modest so be careful not to overestimate the value of this program.
The average monthly benefit in 2013 for a single person is $1261 according to a recent Forbes article. The average benefit for married couples is $2048.
Clearly, the average payout is not going to provide most people with enough money to live on comfortably.
Your Social Security benefit is calculated based on your top 35 earning years. There is a maximum amount of income that can be taxed for Social Security. This year that amount is $113,700.
Someone who paid taxes on the maximum amount of income allowable for 35 years would be eligible for the maximum possible monthly benefit. This year the maximum benefit is $2533.
So even if your benefit fell between the average and the maximum we are still not talking about a very robust stream of income.
The bottom line is this: You must plan well in advance and stick to the plan if you want to be able to retire in comfort because Social Security alone is simply not enough.
The first step for many individuals is to sit down and discuss your vision for the future with an experienced financial advisor.
*The Potter Law Firm is an estate planning and elder law firm with offices in Ashland, KY; northern Kentucky; and the Ballantyne area of Charlotte, NC
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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