Risk 6: Social Security may not provide as much income as you expect. Social Security is an important source of income for many retirees, and only you can know whether it will provide enough income to cover your basic expenses in retirement. The average monthly benefit payment in January 2022 was $1,658. That’s about $19,896 per year. There is a caveat. The past ten Social Security Trustees’ reports indicated that Social Security reserves are likely to be depleted in 11 to 13 years (2033–2035), causing benefits to be reduced by one-fourth. 10
Tip #5. Maximize your Social Security benefits. An annuity could provide retirement income until you reach age 70 (and afterward), allowing you to maximize your Social Security benefits by starting to receive benefits at a later age. If your normal retirement age is 67, your benefit would be 132% larger if you waited until age 70 to start receiving benefits. 11
SOCIAL SECURITY BENEFITS ARE EXPECTED TO BE REDUCED BY 25%
10 Insured Retirement Institute. Aligning Retirement Expectations with Financial Resources. November 2021. 11 “Effect of COLA on Average Social Security Benefits”. “Office of the Chief Actuary’s Estimate of Proposals to Change the Social Security Program or the SSI Program”. “How Delayed Retirement Affects Your Social Security Benefits”. Social Security. Social Security Administration. April 2022
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