Financial Focus

RETIREMENT PLANNING

Q: How much of my retirement income will Social Security cover?

A: According to the Social Security Administration, one in five married couples depend on their Social Security checks for 90% of their income to pay the bills.

Social Security was designed to replace around 40% of your pre-retirement income, not to be your primary source of income.

If you’re not retired yet, here are a few suggestions: Increase the amount you’re putting into your employer’s retirement plan and if you are over 50, you can put $6,000 into an IRA and an additional $1,000 (put it into a Roth IRA for tax-free growth and future tax-fee income.)

Consider working longer. 52% of Americans say they plan on working past 65. This gives you extra time to prepare for retirement and preserves your savings. If you are retired, consider working part-time.

Although Social Security alone won’t be enough to make ends meet in retirement, you can receive a larger check by postponing your claim. Starting at 62, your Social Security increases at 8% to age 70. It stops growing at 8% after 70. If you’re married or divorced, investigate your highest income options with a professional Retirement Planner.

You’ll likely need other sources of income to retire comfortably. Take steps now to build supplemental income. The right annuity will provide such a check. It’s guaranteed for life and unlike a pension, your spouse and children will inherit what’s left in the annuity upon death. Based on the same deposit, some annuities will give you a much larger income than others. The sooner you open one, the more time it has to grow and more it will pay. Again, an expert Retirement Planner will be able to provide you with a comprehensive list of annuities and what each will pay in monthly income for life.