Retirement Planning Dictates Where You Will Live After Retirement
The world is a cheaper place outside of the United States and most European countries. Passport Bros are relocating and becoming ex-pats throughout Southeast Asia, especially Thailand, the Philippines, and Vietnam, as well as South America.
The average blue-collar working man can live like a king off his current US salary. But what he earns now from a 9-to-5 and what he’ll earn later as a retiree are very different. Having a good retirement plan can make all the difference.
A Kingdom for $1000
$1k per month isn’t much to sneeze at in the US. However, in many parts of the world, earning $1k per month puts you well over the poverty level. In fact, in many places, you can live comfortably with this amount of money.
The average monthly benefit from US Social Security is $1700. Although Social Security offers a monthly benefit check to many kinds of recipients – not just retirees – the average payout is about $1,705.79, according to the Social Security Administration. Retirees typically make more than the overall average if they wait until full retirement age.
You can use the Social Security Administration’s (SSA) online retirement estimator tool to determine how much Social Security benefits you will receive at retirement. The tool can be found on the SSA website and allows you to input your personal information, including your date of birth, current income, and estimated retirement age, to calculate an estimate of your future benefits. The link is listed at the end of this article.
Estimate Your SSA Benefits
Another way to estimate your benefits is by reviewing your Social Security statement which you can request online, by mail, or by visiting a Social Security office. Your statement shows your earnings history and the estimated benefits you would receive at different retirement ages.
To get an accurate estimate of your future benefits, it’s important to have an accurate record of your earnings history. This means that you should check your Social Security statement each year to ensure that all of your earnings have been properly recorded. If you find any errors, you should contact the SSA to have them corrected.
The Math Should Be Mathing
The amount of Social Security benefits you will receive at retirement is based on a formula that considers your highest 35 years of earnings, indexed for wage inflation. The Social Security Administration will calculate your average indexed monthly earnings and use that amount to determine your primary insurance amount (PIA), which is the benefit you would receive if you claimed benefits at your full retirement age (FRA).
Your FRA is determined by your birth year and it is between 66 and 67 years old. If you claim benefits before your FRA, your benefits will be reduced by a certain percentage. If you claim benefits after your FRA, your benefits will be increased by a certain percentage.
It is important to note that Social Security benefits are not designed to provide all of your retirement income and are intended to be a supplement to other income sources such as personal savings, investments, and pensions.
Also, Social Security benefits don’t take into consideration average life expectancy. You have to look at your family history and health profile to determine this.
Not to be morbid, but if you’re 62 years old and the average life expectancy of men in your family is 65, there’s no need to wait until age 67 to retire. You have some important decisions to make. There is a school of thought that suggests that age 62 is a better option for most men, but you have to make up your mind with the help of a financial planner.
Conversely, if people in your family routinely live until their 80’s you might want to continue working to earn high wages until you’re 72. If you already have a pension from the US government or the military, you have another reason to wait.
In Conclusion
To determine how much Social Security benefits you will receive at retirement, you can use the Social Security Administration’s online retirement estimator tool or by reviewing your Social Security statement. Keep in mind that the amount of Social Security benefits you will receive at retirement is based on a formula that takes into account your highest 35 years of earnings and the age you choose to claim benefits. It is important to check your statement regularly to ensure all your earnings are recorded correctly and plan accordingly to supplement your Social Security benefits with other income sources.