"Many people expect Social Security to replace their wages in full once they retire. But you should know that if you earn an average paycheck, you can expect your Social Security benefits to replace about 40% of your pre-retirement wages. And if you're a higher earner, chances are Social Security will replace an even smaller percentage of your income. Now let's talk about how much income retirees tend to need."
"There's no hard and fast rule, and everyone's different. But generally, seniors are advised to have enough income to replace about 70% to 80% of their former paychecks. So let's say you're used to living on $100,000 a year. Social Security might replace $40,000 of that. But you may need at least $70,000 to cover your bills without stress. You could potentially boost your monthly Social Security checks by delaying your claim until age 70."
Many older Americans collect monthly Social Security benefits, yet many retirees still struggle financially. Social Security often replaces around 40% of pre-retirement wages for average earners, with higher earners receiving a smaller replacement percentage. Financial planners generally advise replacing about 70% to 80% of pre-retirement income to maintain living standards. Delaying Social Security claiming until age 70 can boost monthly benefits, but building separate savings provides more reliable retirement income. Potential future benefit cuts could further reduce replacement rates, increasing the importance of personal savings and retirement planning.
Read at 24/7 Wall St.
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