Money is not everything… but it certainly helps. The National Institute on Retirement Security reports forty percent of older Americans rely solely on Social Security as income. Only seven percent of Retirees have ideal income scenarios drawing from three sources: Social Security, a Pension, and Savings, commonly referred to as the “three-legged stool.” Alarming? Surprising? Yes and no. When Social Security was established, most working Americans were offered a workplace pension at retirement. This benefit has slowly disappeared through the years as the cost of wages, employee health premiums, and benefits have risen.

Employers and employees each pay 6.2% into a Social Security account. Depending on the year one is born, the full retirement age could be anywhere from sixty-five to sixty-seven. Formulas covering thirty-five years of earnings determine individual payout with the average benefit being $1781 as of February 2023. If at all possible, wait until the age of seventy to draw Social Security at its highest benefit percentage. Information on benefit amounts may be found at ssa.gov.

Employee contribution plans (402Ks, 403Bs, employee stock or shares) are now the common.

When offered a 401K or similar savings plan at a workplace, choose as high a practical percentage match as possible. If you or your Senior have consulted a financial advisor about investing in one of these proposals a source of retirement income has been minimized.

An American retiree has an average of $141,542 saved with approximately $35,345 in a 401K according to Vanguard, a long-standing investment company. Most financial sources advise having saved six times your yearly wage at the age of fifty and ten times an annual salary when retiring at sixty-five.

Adding up the “three-legged stool” (Social Security, 401K, and savings) a total of $178,668 is reached. Lifetime expectancy of ten more years is forecast for a retiree. A yearly income from these combined sources is $198,259, not a bad total. HOWEVER, there are local, state, and federal taxes, groceries, utilities, and commodity prices are on the rise, and medical costs increase with age. Plus, it is important to start saving and investing early to attain these amounts.

The moral of this blog is “Save Early.” Pay off debts such as loans, home mortgages, and personal expenses. Prioritize what is important in your lifestyle. Look into the future and find a reliable Long-Term Care Insurance while young.

Bridge to Better Living knows a comfortable lifestyle in retirement is important. When beginning to look at finances and Quality of Life call Bridge to Better Living. Our services are always at no-cost to the client. Give Bridge to Better Living a call today. Your “time” will be well invested.