There is a retirement crisis in America. Social Security is still alive and well (for now, at least), but it is by no means enough to cover most Americans’ cost of living in retirement. Too many people have little or no savings, and aren’t doing anything to change their situation.
The good news is that you can change your situation, even if you think it’s too late. Here’s what you need to know about where things stand, and what you could do about it.
How much do you need to retire comfortably?
It depends. According to many financial experts, you should plan on needing about 80% of your pre-retirement salary once you retire, including income from Social Security, pensions, and any other savings. And, you may need this income for longer than you think:
Americans know they won’t have enough money, but still won’t save.
The vast majority of those in the prime of their careers are aware they have a problem with their retirement savings. They’re right.
Social Security should be a supplement, not your sole income source.
Social Security isn’t intended to be a sole retirement plan, but a supplement to other sources of retirement savings. Still, many Americans end up dependent on it.
Although the government likely will address the shortcomings Social Security at some point, the reality is that you shouldn’t leave your retirement security at the mercy of politicians.
When planning for retirement, think about Social Security as you would a small pension from an old job. It’s nice to know you’ll have that reliable stream of inflation-indexed income for the rest of your life, but it’s not enough to support your lifestyle.
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