Retirement is something that everyone will, hopefully, face at one point in time or another. As Americans are living longer, more time will be spent in retirement than ever before. For this reason, Social Security Planning Sioux Falls SD needs to be a top priority for everyone. Be aware that changes have been proposed for this program. If one or more of these changes go through, your retirement planning may need to change. This makes planning for retirement even more important. Understanding social security is the first thing you need to do to plan for your future.
Your retirement portfolio typically consists of three parts. Any benefits you receive from pensions may be used for your retirement, social security benefits and investments and savings. Experts estimate you will need approximately 70 percent of the amount you earned prior to retirement to live as you are accustomed to. For those with average earnings, social security only provides approximately 40 percent of what will be needed. The percentage goes up for those in lower income brackets and down for those in higher income brackets. Investments, savings and pensions must make up the difference.
Other factors may also affect how much you receive in social security which is why Social Security Planning Sioux Falls SD remains of great importance. The benefit amount is calculated using the average of your lifetime earnings. The more you earn over your lifetime, the higher the benefits you will receive. For those who have one or more years of no or low earnings, the benefit amount will be reduced. When you choose to start collecting your benefits also plays a role in the benefits you receive. Those who wait until 65 or later to collect get more than those who start collecting benefits at 62.
Those who are self-employed are eligible to receive social security as this is reported when taxes are paid. If you work for a government, local, state or federal you may not pay social security taxes. When this is the case, your social security benefits are reduced as you are receiving a pension. Social security planning will be of great help here also. Speak to a financial advisor today to learn more about planning for your future. You can never start too soon.
