Understanding Social Security Benefits: What Baby Boomers Can Expect
The baby boom generation consists of individuals born between 1946 and 1964. Those born in 1964 are at the tail end of this group, and as they approach age 60, it’s crucial to understand when and how to claim Social Security benefits. At age 62, they can start receiving their benefits, which could significantly impact their retirement plans.
So, how much can retirees expect from Social Security? As of August, the average monthly retirement benefit stands at $1,920, which adds up to about $23,000 per year. This is a substantial increase from 1964 when the average was only $77.57 per month. It’s worth noting that the value of money has changed dramatically since then.
Inflation continually diminishes the purchasing power of money. For instance, $77.57 in 1964 would equate to approximately $10.15 today, according to inflation calculators. However, the Social Security Administration makes periodic cost of living adjustments (COLAs) to help counter this effect.
Here are some important points to consider:
- If you have earned above-average income, your Social Security benefits could be higher than the average of $1,920. By creating a my Social Security account, you can view estimates tailored to your earnings.
- If you are still employed and have not yet claimed your benefits, there are ways to enhance your future payouts.
- The timing of your claim plays a key role in the amount you receive. Delaying your claim until age 70 may allow you to maximize your benefits.
- As you plan for retirement, consider the impact of inflation. Historically, it has averaged around 3% per year, meaning you will likely need more money in the future than you do today.
By gathering knowledge about retirement and Social Security now, you can better prepare for your retirement years and ensure you have enough savings to sustain your lifestyle.
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