You don’t get rich collecting Social Security, not even close. However, you don’t want to screw it up either. The system was never intended to be your total retirement income, but for many it is their only source of retirement income. You don’t want to make it your only source of income for your senior years, but you definitely want it in your income portfolio.
Social Security recipients will receive an 8.7% increase in their monthly income starting in January. The average raise will fall between $150 and $250 per month. With this you can buy a tank of petrol or a bag of groceries. The increase will help about 70 million retired Americans.
Inflation has devoured Americans’ paychecks as groceries, fuel, rent and now interest rates have skyrocketed. By the time the January raise comes around, you’ll likely have spent most of your raise on it and Social Security-related medical expenses.
Pay all you can into Social Security. Too many young adults believe in the rationale that Social Security doesn’t pay much or won’t be there when they retire. At some level it will be there and you will need it when you retire.
Businessmen, farmers, hoteliers, clergymen and others are making a big mistake by finding ways to show only a small amount of income when filing their tax returns. This reduces the amount of taxes owed and decreases the amount paid to Social Security. When they retire, these people become very sad when they find out that they will receive only a minimal amount of Social Security income.
A pastor friend refrained from paying Social Security due to religious objections.
By the age of 70, he had almost no pension and worked until his death. Another ministerial friend claimed very little salary and received very few Social Security benefits when he retired. He spent his last years cleaning hotel rooms and working at Kentucky Fried Chicken to try and survive. An acquaintance of a farmer has worked hard for years, but does not receive a penny in social benefits. You have to pay in to collect it, so don’t sell yourself short.
The average Social Security payment in 2022 is $1,614. Many people who have worked fewer years and paid less, collect less than this amount. Some Americans who worked longer, earned more income and paid more into the system collect $3,345 per month. Again, these numbers will increase by 8.7% in 2023.
Sometimes people retire too early. A friend retired at age 62 and received $1100 a month in Social Security income. In that time he would have collected hundreds more if he could have worked just three more years.
Pay into an individual retirement account, 401k, and anything else you can. You can’t live big on just a Social Security check, but pay as much into the system as you can now because it will be helpful later on.