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Most of us have a pretty near-sighted view of retirement. The further away we are, the fuzzier it appears. The details don’t come into focus until it’s almost too late to change the picture.
For those of us who would like a clearer idea of what retirement could look like in 30 or more years, let’s take a look at one part of the picture: Social Security.
A Glimpse of Your Future?
According to socialsecurity.gov, a 30-year-old who makes $40,000 today can expect a monthly benefit equivalent to $1,320 in today’s dollars at age 65. That gives your retirement picture a little more clarity, doesn’t it? How well could you make it on $1,300 a month?
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Before you answer, consider this: As the website points out, by 2033 the taxes collected to pay Social Security will only cover about 77% of scheduled benefits. That would reduce your monthly benefit to $1,016. As tough as you thought it would be to cover your expenses with $1,300 a month, now imagine living on $1,000 a month!
You might be able to stretch that $1,000 far enough to cover basic living expenses like food, shelter and transportation. But you can forget about trips to visit the grandkids or relaxing getaways with your spouse. And don’t forget about medical bills and prescription medications. What happens if you need nursing home care?
That’s the situation facing 10% of today’s seniors who live in poverty on an average monthly benefit of $1,164. You can be pretty sure that most of them never expected to end up living below the poverty line in their golden years.
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You Can Change the Future!
Here’s the good news: With 30 years until retirement, you can change this picture altogether! By committing to long-term retirement investing plan, the same 30-year-old above could have a million-dollar nest egg by the time he’s 65, easily providing an income that triples what Social Security could pay.
Even if you have less than 30 years until retirement, you can still improve your retirement prospects. The key is to take action now. If you’re in debt, get gazelle intense about paying it off so you can get a move on your future.
Make It Happen With Professional Advice
The next step is to start investing in your workplace retirement plan—a 401(k) for most of us. Then open a Roth IRA that will boost your retirement savings with its tax benefits. Work with an experienced investing advisor who can show you how investing in growth stock mutual funds in these accounts can give you the retirement you want.You can find a trustworthy advisor with the heart of a teacher like Dave recommends through his nationwide network of investing Endorsed Local Providers (ELPs). Your ELP has the experience you need build a retirement plan you can believe in. Find your ELP today.