May is Older Americans Month, and the theme for this year’s observance is “Living Today for a Better Tomorrow.” While much of the theme’s emphasis is on the need for aging Americans to take care of their physical well-being to ensure a healthy future, the theme can also apply to their financial well-being. Not only personal finances, but how older Americans help keep the overall economy alive.
Money may be a bit tight right now, but just a little extra effort today in financial planning can yield big dividends later on, no matter what your age. Here’s why.
A study on retirement satisfaction by researchers at Boston College asked retirees this question: “All in all, would you say that retirement has turned out to be: very satisfying, moderately satisfying, or not satisfying at all?” They found that among retired couples, those who answered “very satisfied” or “moderately satisfied” had income in retirement replacing 72 percent of their pre-retirement earnings, while those who said that their retirement was “not satisfying at all” had income replacing only about 60 percent of their pre-retirement earnings.
If these numbers seem daunting to you, remember that Social Security provides about 40 percent of pre-retirement earnings replacement for the average wage earner, making Social Security the foundation upon which you can build your secure retirement. You also will need other savings, investments, pensions or retirement accounts to make sure you have enough money to live comfortably when you retire. And Social Security offers several tools to help you plan now for a better future.
Every year workers 25 and older receive a Social Security Statement in the mail about two to three months before their birthday. The statement gives you an estimate, based on your current earnings, of what you might expect in Social Security retirement benefits. You can then visit our Retirement Planner — at www.socialsecurity.gov/retire2 — where you can personalize various financial scenarios to determine what your individual retirement plan should look like.
You’ll also want to visit our popular Retirement Estimator. There, you can key in some basic information and get a quick and accurate estimate of your benefit amount using different scenarios. You can find the Retirement Estimator at www.socialsecurity.gov/estimator.
Once you know just what to expect from Social Security in retirement, you will know just how much you need to save to be among the “very satisfied” American retirees. And America will thank you for it, because Social Security payments don’t stop in the bank accounts of older Americans. From there, they venture into the economy, purchasing goods and services.
Learn more about Social Security, see www.socialsecurity.gov.