If you want to be appropriately prepared for each succeeding stage of life as you craft a meaningful legacy to leave behind to your loved ones, you should act in a fully informed manner every step of the way. We specialize in estate planning and elder law, but these areas are naturally connected to retirement planning and long-term financial planning in general.
When it comes to retirement, Social Security will be a major piece to the puzzle for most people. The monthly payout will certainly help, but you have to be fully aware of the limitations, because the benefits are quite modest as they compare to the cost of living these days.
The exact amount that you receive from Social Security will depend upon the amount that you earned during your 35 highest earning years. Exactly when you submit your application for your benefit will also enter the picture.
It is possible to accept a reduced benefit when you are as young as 62 years of age. Depending on your birth year, the exact amount of the reduction will be between 25 percent and 30 percent.
If you are not yet receiving Social Security, the age of eligibility is somewhere between 66 and 67. Once again, the exact eligibility date would depend upon your birth year.
No Cost of Living Increase in 2016
You have undoubtedly heard talk of the concept of “living on a fixed income,” and this can be disconcerting. As we have stated previously, Social Security benefits are modest, so it would be difficult for most people to live comfortably on Social Security alone.
In 2015, the average Social Security benefit for a single recipient is $1328. For a married couple, the average monthly payout is $2176. The maximum individual monthly benefit at the present time is $2663.
Every year the Social Security Administration examines the consumer price index to determine whether or not benefit recipients will be receiving a cost-of-living adjustment or COLA. After reviewing the facts, the SSA has announced that there will be no cost-of-living adjustment for the 2016 calendar year, so the benefits will not go up at all.
We should point out the fact that these adjustments are hardly noticeable even when they are made. For example, the cost of living adjustment for 2015 was 1.7 percent.
Retirement Planning Consultation
When you combine all of this information, you come away with a clear picture: Social Security alone is not going to finance a comfortable retirement, and you can’t count on increases as the years pass.
Plus, Medicare does not pay for long-term care, and most seniors will need living assistance eventually.
If you would like to discuss your future with a licensed professional, our firm can help. We would be glad to become apprised of your situation and make the appropriate recommendations.
To set up a consultation, simply send us a message through this page: Smithtown Long Island Elder Law Attorneys.