Social Security—the supposed retirement-years safety net—is becoming less and less reliable as the population ages. What can you do?
While Social Security never provided a luxurious retirement, in years past it was—at least—a fairly reliable safety net for retirement-aged persons. However, its reliability has diminished significantly as the workforce erodes and alternative retirement funds gain favor. Although the vast majority of beneficiaries rely upon Social Security as the bulk of their income, it has been predicted that Generation X and millennials will receive significantly reduced payments when they reach retirement age.
So, how can you make sure that you won’t receive the short end of the Social Security benefit stick?
Don’t wait until middle-age to think about retirement savings.How many of us concern ourselves with retirement when we’re in our 20s? Nevertheless, if you can start planning for your future when you’ve just graduated from school, your savings will have ample time to generate gains.
Don’t claim benefits early.The longer you wait to claim your benefits, the more you’ll get. People who claim their Social Security benefits at age 62 (while continuing to work) permanently reduce their benefits by approximately 30 percent.
Waiting as long as possible makes fiscal sense. If you can wait, you can increase your payout by 8 percent annually. Ideally, try to wait until age 70. (Unless, of course, if you have medical conditions that prohibit you from waiting that long.)
Think about supplementing your retirement with tangible assets.Do your absolute best to take your future needs into account. As we age, we have medical conditions, lifestyle obligations, and familial responsibilities that become increasingly difficult (if not impossible) to negotiate on reduced income. Tangible assets – such as income-earning property, real estate, and precious metals – provide an alternate source of security that can diversify your savings.
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