The article addresses the myths surrounding Social Security, particularly the misconception that it can fully replace pre-retirement income. It reveals that, for those earning an average wage, Social Security may only cover about 40% of their previous salary. This gap could lead to financial hardship if individuals do not manage their savings effectively. The author emphasizes the importance of realistic expectations regarding Social Security benefits and encourages collaboration with financial advisors to set appropriate retirement savings goals.
A lot of people assume that Social Security will replace their pre-retirement paychecks in full. But if you're hoping the money Social Security pays you is the equivalent of your final paycheck at work, I have some bad news for you - that's not even close to being true.
If you earn an average wage, you can expect Social Security to replace about 40% of your pre-retirement wages. So if you earn $80,000 a year, you might get $32,000 in Social Security benefits if you sign up at your full retirement age.
It's important to have realistic expectations about the amount of money Social Security will give you.
Work with a financial advisor to see how much retirement income you need, and how much should come from savings.
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